Few choose to take mortgage diversion route
Complex sign-up procedures and changes to KiwiSaver have led to little interest in a scheme which allows savings to be diverted into mortgages. Fewer than 1000 homeowners are thought to have signed up to mortgage diversion, which suffered a difficult birth with a three-month wrangle between the banks and Inland Revenue to allow it to go ahead.
The scheme was to have gone live from July last year, a year after the start of KiwiSaver, but it was delayed until September to work through an unwieldly clause which meant most people with credit cards or a revolving credit mortgage were not eligible.
An agreement was made between Inland Revenue and the Bankers Association to allow most people to sign up but it has failed to attract the numbers and there is talk among providers of asking the Government to abolish it.
Greg McAllister, head of wholesale distribution for ASB Group Investments, said he believed the number of changes made to KiwiSaver had made it difficult for people to focus on more than just signing up.
To read the full NZ Herald article click here
Posted: 21 May 2009
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