We have been amazed by the government’s support & response to the current COVID-19 situation. In our view, the most significant assistance to New Zealanders was the announcement of this scheme.
Here is what you need to know about the scheme:
The scheme allows mortgage holders (those with home loans & business loans supported by residential property) to defer all payments associated with their loans for up to 6 months;
The scheme is available to borrowers who have been affected by COVID-19. If your income has been impacted by COVID-19 you will be eligible for a repayment holiday of up to 6 months. If COVID-19 has impacted you in any other way, you will be eligible for a repayment holiday of up to 3 months. Important to note there is no loan-to-value restrictions to be eligible for the scheme;
All banks are now taking applications under the scheme. Links to various online application forms are below;
In terms of how the mortgage holiday works, it is important to note that throughout the mortgage holiday period interest on your home loan continues to be charged by the bank. Instead of this interest being charged to you, it is added to your loan. Your loan effectively grows by the amount of interest payable throughout the holiday period. It is important to note further that this will mean once you begin making regular principal and interest payments after the holiday period that these payments will be higher than your repayments were prior to the mortgage holiday due to the higher loan amount and reduced term remaining on your loan.
Links to online applications: