Kiwisaver Regulations Loosened
September 22, 2008 New Zealand Finance
The law regulating what type of mortgages can be included in Kiwisaver mortgage diversions has been expanded, according to a government media statement issued on the 15th of September.
According to the released statements, the mortgage diversion scheme will now allow the diversion of Kiwisaver contributions to flexible home loans. Although there is a condition under which lenders are not allowed to automatically lend the amount of the contributions back to the individual.
Previous to this, individuals were able to divert half their Kiwisaver contribution to their home loan, as long as it was a table home loan. It was feared that if the system was otherwise, individuals could borrow the amount of their Kiwisaver diversion again, from their home loan, defeating the point. Recent discussions between the government and the banking sector highlighted the growing number of flexible home loans and low utilization of the Kiwisaver diversion feature, this ultimately led to the new rule revision.