KiwiSaver mortgage change closer

Proposed changes to allow investors to divert some of their KiwiSaver contributions into their mortgage are a step closer with the recommendations now sitting with the ministers of revenue and finance.

Mortgage diversion was to become available from July 1 but complications around a clause in the scheme's regulations caused banks to put off accepting mortgage diversion.

The problems relate to a clause which specifies that diversion is not available for mortgages under a revolving credit contract.

This was designed to stop people being able to redraw on them.

But because secure obligations also include those with credit cards and overdrafts it excludes the majority of mortgages.