Looking after your financial wellbeing during COVID-19

Serious couple using laptop while sitting at home

The global impact of the COVID-19 pandemic has been growing for a number of months, but the impact to New Zealanders’ financial wellbeing is becoming clearer by the day. Its impact on our mental health, our income, and our combined financial wellbeing is making a number of us feel particularly vulnerable. Our wellbeing and our finances are interlinked and our ability to make rational decisions can be affected by shocks to either. BNZ’s General Manager of Customer Vulnerability, Martin King, addresses some of the scenarios we are seeing impact our customers in recent weeks.

I’m feeling tired and stressed

Everybody’s health and wellbeing will be tested at some point, and our ability to work through these testing times will vary. It’s important to remember, you aren’t on your own. The Government has put together some great resources to help support your health and wellbeing, check them out here.

My, or my family’s, income has changed and I don’t know how I will pay my bills
  • Your first port of call might be to look into the financial support options provided by the Government, in particular the income support offering.
  • Your next action might be to understand your budget. Work out how much you need for household essentials and what you can afford to pay your utility providers, such as power and internet. Check out Money Talks or Sorted for free budgeting information.
  • Engage with your utility providers and your creditors (for example, a creditor could be your bank or a finance company). Businesses across all sectors are stepping up to support New Zealanders so be sure to consult their websites to find out what help and support you might be able to access.
Can I borrow money to help get me through?

Support is in place across many products we offer at BNZ – whether it be credit cards, personal loans, or overdrafts. Check out our various support offerings here, and then get in touch with one of our bankers who can help work through the best option for you.

If you need just a bit more help to get through, our Community Finance programme offers fee-free, low-interest and no-interest loans to limited income families to help manage debt. We recently announced alongside our Community Finance partners Good Shepherd NZ that we’ll be extending the programme to allow $5 million of no-interest loans to be used as relief for families financially impacted by COVID-19. You can enquire and find out more information here.

I have my home loan with BNZ and am worried about how I’m going to meet my repayments

If your income has been affected by COVID-19 you could be eligible to reduce your current repayment amounts, apply to make interest only payments for up to 12 months, or apply for a home loan repayment deferral (often referred to as a mortgage holiday) for up to six months. You can apply by completing our home loan support form here which will allow one of our bankers to discuss the best option for you. Credit, lending and other criteria apply depending on the help required.

What is a home loan repayment deferral (or mortgage holiday) and is it the right option for me?

A home loan repayment deferral is often referred to as a mortgage holiday and what it means is that you pause your scheduled repayments for up to six months. During a home loan repayment deferral period, you won’t have to make your regular repayments – once in place both your loan and interest repayments will stop immediately and this can provide some short term relief.

Deferment of all repayments should be considered carefully though, as interest will continue to accrue during the deferment period, and will be added to the loan amount outstanding. Interest will be charged in the usual way, which means in the longer term, you are paying interest on interest. The amount outstanding and your regular repayments may be higher at the end of the deferral period. You may therefore pay more interest over the life of your loan.

For example:

Someone has an original loan amount of $400,000 on a 30 year documented term, at an interest rate of 3.5%p.a.. This means their current (minimum) monthly repayments are $1,796.18.

After 1 year of paying off their loan at the minimum principal and interest amount, their balance is $392,323.

If they take a mortgage holiday (repayment deferral) for six months, their new loan balance is now $399,264.84 after interest has been capitalised into the loan. Assuming the interest rate remains the same over the life of the loan, their new monthly repayments after the holiday are $1,846.50.

I’ve accessed all of the support available to me, can I use my KiwiSaver account to support me?

Generally speaking, you can only withdraw money from your KiwiSaver account when you turn 65. However, if you are suffering (or likely to suffer) significant financial hardship, and you’ve exhausted all other avenues of financial support, you may be able to withdraw some of your KiwiSaver account balance. Remember that your KiwiSaver account is intended to support you in your retirement and an early withdrawal should only be considered if you’ve explored all other options. You can understand more about the process here.

How can I do my banking when I cannot access a branch?

Banking online through Internet Banking or through the BNZ app allows you to see your account balances, pay bills and move money around 24/7. If you want to  deposit or withdraw cash we have ATMs and Smart ATMs across the country where you can do this, and a list of locations is available on our website here. When you feel you need to speak to someone you can contact BNZ through secure messaging in Internet Banking, or call us on 0800 275 269 (we’re available 8am–8pm Monday to Friday, and 9am–6pm Saturday, Sunday, and on Public Holidays). We’re also keeping a number of our branches open from 10am–2pm on Thursdays during COVID-19 Level 3 to help our customers who cannot use ATM, phone or online banking. Find a list of branches open here.

Without doubt, COVID-19 is a challenging time, but we’re in this together and you have our support. 

The information in this article is provided for general purposes only, and is a summary based on selective information which may not be complete for your purpose.  To the extent that any information or recommendations in this article constitute financial advice, they do not take into account your financial situation or goals and is not intended as personalised financial advice. While BNZ has made every effort to ensure that the information provided is accurate, you should not rely on this information to make any financial decision without first having sought advice specific to your circumstances from an authorised financial adviser. Neither BNZ nor any person involved in this article accepts any liability for any loss or damage whatsoever which may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this article.

References to third party websites are provided for your convenience only. BNZ accepts no responsibility for the availability or content of such websites.