Home lending survey shows buyers can shrink their repayments dramatically by shopping around the banks .

Shopping around for a mortgage could save New Zealanders up to $28,500 over the lifetime of a loan, according to a new survey of home lending.

Consumer research company Canstar has compared 55 home loans on offer from 10 of the country's banks to find packages that offered the best value, and to help current loan holders see how their lenders stack up against others.

The survey has revealed the raft of savings mortgage holders could make on their repayments, based on the March 4 interest rates used in the survey.

Comparisons prepared by Canstar for the Herald showed Kiwis could save tens of thousands of dollars by considering the types of interest rates on offer from different banks.


For example, a three-year fixed home loan with Kiwibank's Residential Fixed 80 per cent loan saved $18,465 on the same amount over the same period compared to Westpac's Choices Special Fixed product.

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Opting for a residential floating rate for the same sum and time with Kiwibank's offset loan saved $17,016 compared to New Zealand Home Loan's floating rate.

Canstar research manager Mitchell Watson said the annual survey was a useful tool for consumers either looking for a new loan or for comparing their existing loan to what other lenders offered.

"It is important at this point in time because over the last 12 months we have seen quite large changes in interest rates in wide types of loans," he said.

Squirrel Mortgages managing director John Bolton said in reality, banks would match the interest rates of competitors and was sceptical that the survey did not take fees for breaking fixed term interest rate loans into account.

"When it comes to reviewing bank products [the survey] is useful ... they are complicated products so it gives people an idea of what's on offer but I do think it falls short of being an accurate reflection of how good those products really are.

"For the most part [advertised] pricing doesn't reflect the reality of the market."


A 5-star rating system was developed to compare cost and features of the various loans, with Kiwibank scoring four 5-star gongs, followed by Westpac achieving three and TSB Bank scoring two. BNZ scored six 4-star gongs, followed by ANZ with four.

Mr Watson said the survey was intended as a guide to arm consumers with information that can show them where and how to save on their home loan. Consumers should be wary of incentives offered by banks to lure in new customers that included Cricket World Cup packages, cash bonuses and FlyBuys points at the time of the survey.

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"There are some fairly good incentives [but] if you bring it back to what you are getting a home loan for, you are looking to borrow to buy, refinance or invest in property and that should come back to the basics of what you need which is competitive interest rates and flexible home loan conditions."

Compared to the 2014 survey, Mr Watson had noted more competition between banks which meant there were better offerings.

NZ Bankers Association chief executive Kirk Hope said: "The Canstar report demonstrates the high level of competition ... and the importance of consumers doing their research, and talking to their bank to ensure they get the best possible deal."

Comparing loans

Savings on a $300,000 mortgage over 25 years
• Kiwibank's Offset at 6.55% with monthly repayments of $2035
• NZ Home Loan's floating rate at 6.85% with monthly repayments of $2091.72
$17,016 less with Kiwibank
Three-year fixed
• Kiwibank's Residential Fixed 80% at 5.55% with monthly repayments of $1851.23
• Westpac's Choices Special Fixed at 5.89% with monthly repayments of $1912.78
$18,465 less with Kiwibank
Source: Canstar, based on March 4 interest rates and does not includes any fees and charges.