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The New Zealand banking system
Moving to a new country can be daunting and exciting and its worth knowing before you arrive that the New Zealand banking system is different to the UK system
Debit Cards and Credit Cards
Whilst all of the banks in New Zealand provide debit cards, the system is slightly different to the system used in the UK. In New Zealand, it is called EFTPOS (Electronic Funds Transfer at Point of Sale) and you must be present with your card to purchase goods. So unfortunately, your debit cards cannot be used over the Internet or via the telephone for these types of purchases, you will require a credit card. As a new migrant to New Zealand, provided you have employment and/or some capital funds to transfer, you shouldn't have any problems arranging a credit card. However, the banks in New Zealand are more conservative with the limits they provide, so you may start with a lower limit than you're used to!
Credit Rating
Say goodbye to that lovely credit rating you've worked so hard to get once you leave the UK, it won't be applicable in New Zealand! This won't hold you back from obtaining financing, though, as the New Zealand credit check system is just slightly different, and only measures unsavoury past behaviour rather than measuring good past behaviour. So provided you haven't been deemed a credit risk in New Zealand in the past, your credit check will be satisfactory.
Home Loans
Instead of using multiples of your income, like most of the banks in the UK, New Zealand banks will actually assess how much you can afford to pay back each month. It's a more tailored system, taking into account any debts you already have, and any extra income or savings you currently have as well. How much you can borrow will also depend on the type of property you purchase in New Zealand. You can usually borrow up to 80 per cent on a freestanding property without too many problems, but the amounts are usually lower for apartments and terraced houses. In some instances, you may be able to borrow up to 100 per cent of the property value, but there may be additional charges such as loan processing fees and lenders' mortgage insurance. Lenders mortgage insurance is basically an up-front fee, often several thousands of dollars, for lending you more.
Interest rates
The current base rate in New Zealand is one of the highest we've seen in a long time. This is good news for investors, not so good news for home loan borrowers. With floating home loan rates at 9.55 per cent (current at the time of writing), it can be an expensive time to purchase property. However, by maximising your deposit, you can reduce the amount you need to borrow, and potentially save yourself thousands of dollars on your loan.
Maximising your UK savings
When it comes to converting your funds to New Zealand dollars, it's important to get the best exchange rate possible from a financial institution you can trust. Even if you don't require a loan in New Zealand, it still makes sense to get the most out of your savings after all, you've done the hard work to save! Ensure you get the best rate possible, by doing your research the Internet is a great tool for showing the past trends on foreign exchange rates.
Opening an account
As the only New Zealand Bank with a representative office in the UK, the ASB Bank can establish an account for you in New Zealand, and take care of your foreign exchange requirements as well. We establish two bank accounts for you an account that you can use in New Zealand, and also a Transfer Facility Account in the UK. This allows you to move your UK savings to the Transfer Facility Account, and from here we can convert them to New Zealand dollars and send them to your ASB account in NZ.
We use commercial exchange rates normally reserved for large corporations, which means you are getting an excellent rate for your funds. Your debit cards are then ready and waiting for you, when you arrive on the sunny shores of New Zealand. All of this is done by a relationship manager based in the UK no long distance phone calls in the middle of the night!
For more information:
ASB Commonwealth Bank
NB. Please remember to research all the available options when dealing with any financial matters during the emigration process
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