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You have options – and we can help

With increasingly uncertain times ahead have you got the financial measures in place to assist you is a question at the front of consumers minds. However, it doesn’t have to be all bleak. There are some options available that might create a new sense of security to you and your family.

It’s a troubling time, to say the very least and many of our clients are wondering how they’ll make it through with their health and their finances intact.

While the government’s huge financial support package should go some way to protecting jobs and incomes in this country, many Kiwis will still find they struggle to pay their mortgage. Thankfully, the government announced this week that they’re working on a deal with the major banks to make a six-month mortgage holiday available to those who need it. The details are still being finalise.

In the meantime, it’s worth looking at the options – including a mortgage holiday – you can consider to relieve the money pressure in the short-term. Here we outline the pros and cons of each.

Mortgage repayment holiday

This is the option being discussed by the government. With a repayment holiday, you’ll pay nothing on your home loan for a set period. That can come as welcome relief if your income has all-but dried up. These should be approached cautiously – you’ll still be charged interest, so your loan will get larger each month. This is the most expensive of the options but can get you the biggest break on your monthly outgoings.

Interest-only mortgage

Another option is to switch to an interest-only mortgage structure. This can be especially effective if your mortgage isn’t that big, so your interest payments are relatively low each month. During that time, you’ll pay only the interest on your loan – none of the capital. It’s important to make this arrangement only short-term – interest-only loans are more expensive in the long run.

Home loan extension

If you have only a few years left on your mortgage, extending the term of your loan will help reduce the amount you pay each month. Again, this means you will end up paying more in total interest costs on your loan by structuring it over a longer period.

Choose the option that’s right for you

Each option has its pros and cons – the one that’s right for you will depend on your particular circumstances. The best thing to do is to schedule a virtual meeting with one of our expert advisors. We can help you decide what will be most beneficial to you, and then help you put that in place, all for free.

Get in touch with the team at Global Finance – we’re standing by to help get you through.