New tool factors in cashbacks and fees
The banking sector has rolled out a new online tool that allows borrowers to compare up to three home loan offers side by side, helping them assess the true cost of different deals.
The calculator responds to Recommendation 10 of the Commerce Commission’s 2024 market study, which urged lenders to make offers easier to compare by including cashbacks and fees.
The calculator, hosted by Interest.co.nz, is designed to give borrowers a clearer picture of their options.
Tool highlights effective interest rate
The calculator estimates the effective annual interest rate on each offer by factoring in not just the headline rate but also cashback, fees, and other incentives. This enables borrowers to see what they will actually pay once all costs and benefits are included.
NZBA backs transparency in lending
New Zealand Banking Association (NZBA) CEO Roger Beaumont (pictured) welcomed the launch, saying it would support better-informed mortgage decisions.
“We are delighted to launch the calculator in association with Interest,” Beaumont said in a media release. “Our banks compete strongly in the home loan market, and we support providing borrowers with clear information to help make one of the most important financial decisions of their lives.
“We’ve tried to keep the calculator as user-friendly as possible. We hope uptake is strong and that users find it helpful.”
Backed by banks
The calculator’s development and ongoing maintenance is funded by members of the New Zealand Banking Association.
For mortgage advisers, the tool provides another point of reference to help clients assess different lender offers, particularly in a competitive environment where incentives and cashback deals can heavily influence borrowing costs.
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