BNZ has disestablished its two tier home loan interest rate structure, removing all its carded, or advertised, home loan rates for borrowers without a deposit of at least 20%.
However, such borrowers are still able to take out a loan from BNZ, but will be charged the bank's low equity margin on top of the interest rate faced by borrowers with deposits of at least 20%.
In changes effective today BNZ says all mortgage rates for fixed terms from six months to seven years for its Standard & Fly Buys loans and its Global Plus loans have been removed for high loan-to-value ratio (LVR) lending. They were broadly 50 basis points higher than its rates for borrowers with deposits of at least 20%.
The bank's standard rates are available to borrowers without a deposit of at least 20%, but they'll additionally have to pay a low equity margin of between 0.35% to 1.15% depending on the size of their deposit. See more details here.
The latest figures on banks' high LVR mortgage lending show they have capacity to increase it. The ratio of such lending made up just 3.8% of new mortgage commitments in January, well below the Reserve Bank's 10% limit, which banks will be tested on for the first time at the end of March. In the December quarter BNZ's net high LVR mortgage lending fell $294 million, leaving 14.2% of its total home loan book, by value, at LVRs above 80%.
The Reserve Bank introduced restrictions on banks' high LVR residential mortgages from October 1 last year. This means banks must restrict lending at LVRs above 80% (where borrowers don't have a deposit of at least 20%) to no more than 10% of total new mortgage lending. This 10% limit excludes high LVR loans made under Housing New Zealand’s Welcome Home Loans scheme, the refinancing of existing high-LVR loans, bridging finance or the transfer of existing high-LVR loans between properties, and new residential construction loans.
Two tier home loan offers became common from New Zealand banks last year with the Reserve Bank's high LVR restrictions being introduced. Most other banks still have them. See all carded, or advertised, bank home loan rates here.
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.69% | 5.85% | 6.29% | 6.65% | 7.20% |
 |
5.49% | 5.85% | 5.95% | 6.60% | 7.20% |
| BNZ | 5.49% | 5.85% | 5.95% | 6.35% | 7.20% |
| Kiwibank | 5.49% | 5.99% | 6.40% | 6.90% | |
 |
5.49% | 5.85% | 5.95% | 6.35% | 7.20% |
| Co-op Bank | 5.39% | 5.85% | 5.85% | 6.25% | 7.10% |
 |
5.39% | 6.29% | 6.55% | 7.20% | |
| SBS / HBS | 5.35% | 5.60% | 5.80% | 6.10% | 6.70% |
| TSB | 5.40% | 5.85% | 5.99% | 6.40% | 7.20% |
14 Comments
From my "Brit councils can always outdo ours" file I give you Hackney Council does its best to kill the London tech sector. The parallels to the fabled Quartier Infomatique in Christchurch are obvious.
We are not alone!!
It seems that property "bubbles" are forming everywhere:
"Foreign investment boom for London property market"
As house prices in London continue to rise, many young Londoners are finding themselves struggling to get on the housing ladder.
Inside Out has been to Hong Kong to meet the cash-rich consumers who view property in the capital as a safe investment, and the local first-time-buyers they are competing with.
Estate agent Savills estimates in the last year, as much as 85% of new build property in prime central London was bought abroad.
link:
The Vanity Fair article last year was just about the definitive word on this.
http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde…
Certainly, the U.K. Government has copped some flack in the past few days for not taking any stance over the Crimeia that would block the City's business in laundering Russian Oligarch's money.
London, where a 1-2 bed flat will cost $36m in 2050:
http://www.theguardian.com/business/2014/mar/04/average-small-central-london-flat-36m-2050
.. question to you , Hugh ... if we have a decent correction , say a 25 - 30 % plunge in house prices ... will the Ozzie banks start calling in the loans of the highly leveraged , particularly the investors/landlords ... or demanding more equity ... ? ? ?
That'd be seriously sad , wouldn't it .... would you shed a tear for them ?
... aha de haaaaaaa .... Sad Daddy !!!
Fracking is no goose with a golden egg. http://www.zerohedge.com/news/2014-03-10/natgas-nightmares-descending-d…
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