Higher rates will apply for low equity housing loans, plus low equity margins remain as well

BNZ has become the latest bank to separate its mortgage rates into two sections by adding new higher rates for high LVR loans.

The BNZ move follows similar changes by ANZ, Kiwibank, SBS, and Westpac.

Each rate in the BNZ offer is raised by 50 bps over loans supported by LVRs less than 80%.

The legacy rates will still apply to BNZ customers who may not have 20% equity so long as they "do not require additional funding".

However, the high LVR rates will apply "when the property provided as security changes and the amount of lending increases" into the >80$ LVR range.

BNZ's low equity margins apply on top of these new rates.

These margins are added to the >80 LVR rate and range from +0.35% for LVRs between 80-85%, +0.75% for LVRs to 90%, +1.00% to 95% and +1.15% above 95%. That means a 2 year 95% LVR loan would have an all-up interest rate of 7.45% (ie 6.45+1.00).

The new BNZ home loan rate structure (before the addition of low equity margins) now becomes:

(* Only available in their GlobalPlus option.)

These changes are effective October 18, 2013.

Compare all carded, or advertised, bank home loan rates for all lenders here. 

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