New Zealand Legislation: Regulations

23 Which types of mortgages qualify for participation in mortgage diversion facility

• (1) A mortgage qualifies for participation in the mortgage diversion facility if—

  • (a) it is a mortgage over the mortgagor's principal residence; and

  • (b) it secures obligations that arise under a home loan facility, whether or not the mortgage also secures other obligations; and

  • (c) subclauses (2) and (3) are complied with at all times.

  (2) Contributions diverted from the member's KiwiSaver scheme or complying superannuation fund may only be applied to the payment of amounts (including principal, interest, or any other amounts payable) that are owing under the home loan facility secured by the qualifying mortgage.

  (3) If contributions are diverted in accordance with subclause (2), the member must not be able, without making a specific application to the mortgagee, to access, withdraw, or redraw (as applicable) the amount of any diverted contributions (in whole or in part).

  (4) To avoid doubt, the restrictions in subclause (3) apply even if the home loan facility—

  • (a) is a reducing revolving credit contract; or

  • (b) permits amounts that have been paid by that person over and above any repayment amount or minimum payment amount specified, or amounts that have been paid in advance of any specified schedule of repayments, to be accessed, withdrawn, or redrawn or otherwise advanced to that member (as applicable).

  (5) In this regulation, unless the context otherwise requires,—

  credit limit has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003

  home loan facility—

  • (a) means a credit contract (within the meaning of section 7 of the Credit Contracts and Consumer Finance Act 2003) where the advances under the credit contract are primarily used or acquired for purposes in connection with the member's principal residence (even if the advances may also be used or acquired for other purposes); but

  • (b) excludes a non-reducing revolving credit contract

  non-reducing revolving credit contract means a revolving credit contract that does not expressly provide for a credit limit that reduces over the term of the contract according to a specified schedule of repayments

  reducing revolving credit contract means a revolving credit contract that expressly provides for a credit limit that reduces over the term of the contract according to a specified schedule of repayments

  revolving credit contract has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003.

  Regulation 23: substituted, on 16 October 2008, by regulation 4 of the KiwiSaver Amendment Regulations (No 2) 2008 (SR 2008/307).