BankDirect launches shared home loan

BankDirect, the internet and phone banking subsidiary of ASB, has launched New Zealand's first packaged shared home loan. HOME LOANS: THE OPTIONS

Bank head Stuart McKinnon, who took over last year, said the move was designed to "normalise" shared home loans, as it had with its 2005 launch of 100% home loans.

Before that, 100% loans either had strings attached, such as the National Bank's requirement for family members to provide security guarantees, or they were not advertised and only the financially savvy knew to ask for them.

BankDirect's shared home loan, advertised nationally, allows up to six people to buy a property together as a home, holiday home or a renter.

There are no extra costs levied by BankDirect over and above ordinary home loans, although McKinnon said people considering one should get legal advice as they all were jointly and severally liable for repaying the loan.

They would also be wise to ensure they had adequate insurance in case one borrower died, or became too ill to work.

McKinnon, who started at ASB as a bank teller 20 years ago, said research showed groups of friends, family members and even work colleagues would consider buying properties together, faced with high prices which prevented them getting a house, or fulfilling their dream of owning a bach.

He said there was also a market where siblings might help each other, or where families, with kids off their hands, might look to buy a bach with friends. "We are normalising shared home loans," he said.

The shared home loan would turn what had been a strategy for the clever few into something the wider public could consider.

It's the latest innovation for the bank, which 10 years ago pioneered internet and phone banking in New Zealand. It also shows there is life in the brand, which last year canned its TV advertising and moved its senior executives, including managing director Jim Anderson and marketing whizz Anna Curzon, to other roles within ASB.

BankDirect launches another venture tomorrow. Live webchat will enable new customers with questions to ask them online between 8am and 6pm weekdays rather than ring in. All communications are one-on-one so other site users won't be able to see what's being said.

In theory, even conditional approvals for home loans could be sought through webchat, McKinnon said.

He won't say how many customers BankDirect has, but figures from Nielsen NetRatings suggest it wouldn't be enough to fill either Eden Park (48,000 seats) or Wellington's Westpac Stadium (34,500 seats).

In a September survey, Nielsen NetRatings found BankDirect's customers were the most likely users of any website in the country to buy online.

It said just under 62% of BankDirect's online customers made online purchases during the month. Assuming each BankDirect customer went online once a month a fair assumption, McKinnon admits the bank has around 22,300 customers, equalling the number of unique browsers Nielsen measured in September.

The shared home loan takes the number of distinct home loan categories in New Zealand to 23.

- © Fairfax NZ News