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Kiwibank launches two prices for both 1 and 2 year fixed home loan rates with cheaper deals for borrowers with 20% equity

Kiwibank launches two prices for both 1 and 2 year fixed home loan rates with cheaper deals for borrowers with 20% equity

Kiwibank is offering borrowers with at least 20% equity in their property a two year fixed-term home loan rate 20 basis points lower than borrowers without 20% equity.

The bank says it's splitting its offer for two-year fixed lending, offering 5.75% for people with 20% or more equity, and 5.95% for those with less than 20% equity.

The bank's two year rate has been 5.50%, meaning both new offers are increases.

And, also from Monday, Kiwibank will increase longer term rates for all new lending. Kiwibank's carded, or advertised, three year fixed-term rate will rise 35 basis points to 6.40%; four year rate increases 40 basis points to 6.70%, and its five year rate will rise 30 basis points to 6.90%.

Kiwibank also said it was holding its floating, or variable, rate at 5.65%.

However, its one-year special of 4.89% will be restricted to customers with at least 20% equity in their property. Borrowers with less than 20% will be offered 5.25%.

The state owned bank said the increases were because of rising funding costs and a response to incoming Reserve Bank restrictions on low equity lending.

Kiwibank's increases come after all four Australian owned banks - ANZ, ASB, BNZ and Westpac - have already increased most of their fixed-term rates.

The Reserve Bank announced last month that from October 1 banks will be required to restrict new residential mortgage lending at loan to value ratios (LVRs) of over 80% to no more than 10% of the dollar value of their new housing lending flows. Kiwibank has said it will prioritise first home buyers over property investors.

Kiwibank this month started self insuring new high LVR home loans with Australia's QBE Insurance having stopped underwriting new lenders' mortgage insurance in New Zealand.

See all advertised mortgage rates here.

  1 yr 2 yrs 3 yrs 4 yrs 5 yrs
5.45% 5.95% 6.50% 6.90% 7.10%
ASB 5.40% 5.95% 6.40% 6.80% 6.99%
BNZ 5.39% 5.95% 6.29% 6.60% 6.90%
Kiwibank 4.89% 5.95% 6.40% 6.70% 6.90%
Westpac 4.94% 5.95% 6.50% 6.90% 7.10%
Co-op Bank 4.94% 5.50% 5.95% 6.25%  
HSBC Premier 4.99% 5.65% 6.05% 6.30% 6.60%
SBS / HBS 4.95% 5.45% 5.80%   6.29%
TSB 5.40% 5.85% 6.45% 6.80% 7.00%


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This is when KwiBank is starting to get some momentum with homeowners, now comes this. I thought they are supposed to make a difference on the mortgage market being a state owned bank. They simply can't resist the dollars as well. This makes them no different from the other big Australian banks.

as far as i can see, they are the lowest of the big 5... but i coud be wrong

This is surprising, though I still believe if you hold 20% equity you should still be able to bargain for a lower rate than advertised. 
As for those folk with less, then your bargaining power has been lost. Largely thanks to the introduction of LVR's - played directly into the banks hands.

An idea for a Tui slogan:
"The banks have just increased their term deposit rates"... YEAH RIGHT!

Ha ha! Obviously i missed that one!
There goes my theory.. although will others jump on board?

No worries Dobrydan, but of course they will, normally with something totally irrelevant to what was discussed.

So Westpac has a spread of say 1.55 to 1.8 on deposit rates to rates when they lend it on.  Quite good for them.  In addition, depositors to them are not secured, but the money banks put out on mortgages is secured.  So just what is that lack of security worth.  What is the number.  Are depositors being underpaid ?
If I wanted to buy a house, and did not give the bank mortgage security, what interest rate would they charge.  With security say 6%.  Without security say 10% or 12%.  Maybe more  Thats quite a spread.

Days to the General Election: 22
See Party Policies here. Party Lists here.