Kiwibank offers new savings sweeteners but financial experts say it's important customers do homework.

The latest deal from a New Zealand bank to lure in new customers with "free" money and zero fees comes with a warning tag from financial experts.

Kiwibank is the latest bank to offer customers a sweetener for changing to its services.

An advertising campaign for its Happy 2014 deal launched on Sunday promises $2014 to anyone who transfers their home loan and everyday banking to it.

In December, Westpac began a promotion offering customers the chance to win $5000 for switching their income payments to the bank before the end of February, and BNZ is offering new lenders a credit card at home loan interest rates.


Economic commentator Bernard Hickey said consumers should be wary of such offers, which were common tactics for banks attracting new customers.

"It's not unusual for banks to offer deals like this, whether it's flat screen TVs or $300 of petrol or some sort of gimmick, but you have got to consider how much the total cost of the mortgage is going to be over its lifetime and ignore what appear to be some juicy one-off benefits," he said.

"The risk here is if you choose to take advantage of this deal which apparently gives you free money upfront, it's never free money upfront - you eventually pay for it with interest over the long run."

Squirrel Mortgage Brokers chief executive John Bolton said taking up the offers but paying high interest rates could add tens of thousands of dollars to a mortgage.

"All the banks are making offers upfront and all are much of a muchness, very similar.

"It's not uncommon to get at least $2000 from most of the banks, but it's far more important to get the lowest interest rate because that's where the savings are.

"Over the life of a loan you could save yourself $40,000 to $50,000 by getting the structure right."

Kiwibank spokesman Bruce Thompson said the company had tried to get an edge on the competition with an enticing deal.

"Early in the new year it is very competitive between the banks to try and attract people with existing mortgages who might be tempted to switch or people who want to buy," he said.

"We wanted to get an offer out into the market that people would find attractive. Around this time of year is a time when people make big decisions so we wanted to make sure we are on the shopping list.

"From our position, it's the opening shot for the summer mortgage war."

Mr Hickey said customers should always calculate the amount of the mortgage over its lifetime and ensure they know how much they would pay in fees - especially fees for terminating loans with their existing bank.

"Always be sceptical and analyse special offers from banks. Banks are there to do a job, to make money, make a profit, and the more money they can encourage you to borrow the more money they make.

"So what appears to be a good deal upfront needs to be analysed and considered over the long run."

Planning fails to match faith

More than two-thirds of New Zealanders believe they will achieve their financial goals, according to a study by Nielsen.

The survey revealed that 64 per cent of respondents were confident of meeting their financial expectations for the future, but of those only 20 per cent believed their current planning was enough.

Over a third of the 500 New Zealand respondents said they had no confidence of meeting their goals with either their current asset allocations or by modifying them.

Saving for retirement was the first priority, with 41 per cent doing so. Saving for unexpected household emergencies came second at 39 per cent, followed by health at 28 per cent and a luxury purchase at 24 per cent.

The lowest priorities were second or holiday homes, 7 per cent, followed by start-up businesses and property upgrade purchases at 9 per cent.

Think Twice
Do the math: Use online mortgage calculators to work out if the loan will be cheaper in the long term with the rates offered by various banks (try

Read the fine print and ask questions: Understand what you will paying in transfer fees, break fees and service fees over the life of your loan.

Seek advice: Talk to an independent financial adviser to get informed advice and help you wrangle the best deal for you.