If you are a first home buyer and are wanting the most competitive package, then it would be hard to beat the FirstHome Combo from SBS.
The FirstHome Combo is only available to first home buyers, but it’s open to anyone that is eligible to the Kainga Ora First Home Loans too. That means you can buy a home with a low deposit and SBS will give you the very competetive home loan interest rates too.
Who is SBS Bank?
They also love helping Kiwis get into home ownership, and one of the most popular options is the FirstHome Combo.
SBS Bank is one of the smaller banks.
They started in 1869 when one of the founders (James Walker Bain) travelled on foot from Dunedin to Invercargill. James was determined to help the people of Southland safely save their shillings, florins and pounds, and provide a way to borrow for their first home.
His passion was to build a financial institution owned by the people who used its services, and offering good rates and low fees.
Now SBS Bank is a mutual bank, (still owned the customers who they call members) and sticking to the belief that banking is all about putting people first with a range of services, and offering good rates and low fees.
What is the FirstHome Combo?
The FirstHome Combo is a special package for first home buyers.
It offers a combination of discounted home loan interest rates, plus a cash contribution of $2,000 to help cover some of your expenses. If you use the SBS house insurance then you will get an additional $1,000 and the same if you switch your KiwiSaver to SBS – they will add $1,000 to your plan.
The discounted interest rate is almost always the lowest available.
It’s a great deal and you need to check that your mortgage adviser has at least considered this.
SBS Home Loans Are More Flexible Too
Did you know that you can pay extra on the fixed rate loans too?
Most people will want to lock in their lending on the lower fixed rate loans, as this gives you the better rates (of course!) but also offers some certainty.
The issue with fixing the rates is that it typically also means you have less flexibility to pay your home loan off faster, BUT with SBS Bank you do still have some flexibility without risk.
What does this mean?
Most banks will let you increase your repayments a bit, but doing so can trap you into a shorter loan term which can be a huge problem if the circumstances change – if interest rates increase or if your income decreases – ie if you start a family or decide to change jobs etc.
With SBS Bank you have a couple of options that enable you to pay your home loan off faster and without risk:
- You can then pay an extra 10% on the fixed loans without penalty. The loan term gets reduced at that point, BUT they just need a request to extend again and do not reassess like some banks do.
- You can also increase your repayments when you are fixing your loans. This means that you can increase your repayments to suit your budget at the time and really make a dent in your mortgage, plus you can still increase by 10% if that suits. You can do both of these but you still have the flexibility to revert back to the minimum when the loan comes off that fixed term.
Your mortgage adviser can explain the options to you, and it’s a good idea to split your mortgage into a few loans too as that gives you even more flexibility.
