Mortgages

Could you get a better deal from your bank?

Property owners are being reminded that it’s worth checking to see if they qualify for an interest rate special from their banks.

Thursday, November 27th 2014

The big banks are offering advertised specials to borrowers with more than 20% deposit.

The release of new CVs in Auckland shows average property value increases of 29% across the city from 2011-2014.

That means even those who bought property with a small deposit in those years will now likely have equity of at least 20%, entitling them to better interest rate deals, as well as added sweeteners that are on offer, such as big-screen TVs and Playstations.

The difference could be significant: If you're paying a standard rate of 6.39% on a $500,000 loan you'll fork out $3695 a month. If you can qualify for the special 5.75%, you will spend only $3510.

At Westpac and BNZ, low-equity borrowers are charged a premium on top of standard interest rates, which can add up to an extra 1.75 percentage points.

If borrowers can show their equity has grown, the margin can be lifted. Westpac refused to say how many customers were paying low-equity margins or whether they would be contacted to assess that. BNZ said customers would need a “credit event” to reclassify their LVR position and have their low-equity margin removed. “LVR is reassessed when a credit event occurs. A credit event is typically an application for or approval of new or additional lending.”

Broker Kris Pedersen said all the banks were fighting hard for business. “You get what’s going out publicly in their marketing and then behind the scenes they are extremely aggressive, fighting over business.”

Another, Glen McLeod, said he had been able to negotiate a $8000 cash contribution, 1% off floating rates for big loans, 0.8% off floating rates for loans about $750,000 for customers.

Some customers had been asked if they would like to take the chance to borrow more money.

A BNZ spokeswoman said the CV increase would present opportunities for some customers to use their increased equity to renovate or make improvements.

ANZ sent customers a letter saying: “Because you’re making good progress repaying your ANZ Home Loan, you can choose to get a little extra if you need it.”

They were then offered the option of a home loan top up or a reduction in mortgage payments.

A spokesman said: “From time to time we contact customers whose repayments are ahead of schedule, or who have built up equity, with new lending options specific to their situation.”

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.