Understanding MyProperty assumptions
MyProperty estimates when you’ll be mortgage-free and how you can get there faster. It uses assumptions to estimate both your mortgage-free date and the impact of any changes you make to your home loans. Some of these assumptions are different than those used elsewhere at BNZ, such as in the regular view of your home loan in Internet Banking.
If you have more than one loan, MyProperty assumes your current total repayments will continue unchanged until you’re mortgage-free. This means MyProperty assumes that once you pay off a loan, you’ll add that loan’s repayments to your remaining loan with the highest interest rate. This assumption is unique to MyProperty.
We can’t calculate any early repayment charges that you may be charged for doing this, so any potential early repayment charges aren’t included in MyProperty calculations.
Let’s imagine you have two home loans:
- Current balance: $100,000
- Interest rate: 4%
- Repayments: $300/fortnight
- Final payment date: 1 January 2024
- Current balance: $200,000
- Interest rate: 5%
- Repayments: $700/fortnight
- Final payment date: 1 January 2028
MyProperty assumes that when you pay off Loan 1 on 1 January 2024, you’ll choose to increase the repayments on Loan 2 by $300. So, you’ll still be paying $1,000 a fortnight overall, even though now you only have one loan.
MyProperty assumes that your current interest rates will remain the same over the life of your loans. In reality, interest rates are likely to change. When you re-fix the interest rate on your fixed rate loans, or the interest rate changes on your variable loans, your mortgage-free date estimate will adjust based on the new rate.
Many customers with TotalMoney loans have a considerable amount offsetting their loans. This has a significant impact on the amount of interest you pay, which in turn will impact your mortgage-free date as more of your repayments will go towards paying down principal. MyProperty assumes that your current level of offsetting will remain the same over the life of your TotalMoney loans. This assumption is unique to MyProperty. In reality, your offsetting amount will typically go up and down with daily spending.
Undrawn or interest-only loans
MyProperty only includes the amounts you’ve drawn down from the loans that you’re repaying the principal on. It won’t include loans that you haven’t drawn down, or that have interest-only payments in your total home loan balance or in any of the repayments calculations.
The minimum payments for tailored loans usually increase each year on the anniversary of the date you first borrowed money. MyProperty doesn’t include these future increases when calculating your mortgage-free date. Once an increase happens, MyProperty includes the new minimum payment amount in the calculations. You will then have a new estimated mortgage-free date and minimum repayment amount.
- Final payment date – The date we expect your loan to be paid off when using the MyProperty assumptions. This date is likely to differ from the expected end date* of your loan, as the repayment amount assumption and the offsetting amount assumption described above and used in MyProperty are different from the assumptions used to calculate your expected end date. When calculating your expected end date we do not assume that you will transfer your loan’s repayments to a different loan once that loan is paid off, or that you’re offsetting.
- Mortgage-free date – The date we expect all of your loans will be paid off, when using the MyProperty assumptions. This will be the same as the final payment date of your last loan.