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More signs banks easing lending rules

UPDATED: In another tentative sign banks are starting to gradually ease their lending criteria Kiwibank has made changes to its rates for loans with low equity levels. The changes have been made as the bank has changed the way it insures its mortgage book.

Tuesday, August 4th 2009, 11:11AM 5 Comments

While most of the big banks will only lend up to 80% LVR on standard rates and then charge a low equity premium for home loans above this level, Kiwibank has gone the other way.

It has removed its LEP. The premium was generally another 20 basis points added to the standard rate.

Kiwibank says it has not changed its lending policy around LVR values as it always lent above 80% LVR.

On occasion it charged an additional rate premium on the appropriate term at the time.

The last rate/term this applied to was its two-year fixed rate.

"All we have done is merely remove this  condition from our rates at present so will not be charging an additional rate as previously identified on any terms, no other changes have been made," it says.

This change indicates a slight loosening of policy and will make it easier for borrowers who don't have a 20% deposit to get into the housing market.

Last month Westpac eased its lending threshold from 80% to 90%.

Kiwibank spokeman Bruce Thompson says the change has come about because Kiwibank has altered its risk management. In the past it had only insured part of the loans, now it insures all its loans.

No figures were available on the costs to customers, however he said that it should end up in being cheaper for borrowers.

Kiwibank uses QBE for its mortgage insurance.

Check and compare all home loan rates here

Tags: Mortgage Rates

« Bollard keeps OCR steady but flags further cutsNZF moves from LMI to LEM »

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Comments from our readers

On 4 August 2009 at 11:54 am Kit Jackson said:
Interesting that there is no mention in the article that at the same time, Kiwi Bank's LMI fees have gone up by in some cases over 100%...
On 5 August 2009 at 11:49 am Mike said:
And Kiwibank have never really had a low equity rate premium - they've used one or two terms with a low LVR special rate, which is different. All they've done is drop the 2yr rate a bit to hide the LMI increase.
On 5 August 2009 at 1:03 pm 'Smoke and Mirrors' said:
Classic case of "Robbing Peter to pay Paul".
On 6 August 2009 at 1:49 pm Bernie Cook said:
The Kiwibank spin doctors are working overtime again. Or should we call them magicians? Show you an illusion with one hand while the other hand does the dirty work.
On 6 August 2009 at 4:12 pm CBS68 said:
More importantly why has SBS done this? The 1-yr swap rate which the banks base their increases on has not gone through the roof - it remains at 3.13 and has been in the range 2.88 to 3.42 (its peak at the start of Apr-09)since the start of Feb-09. This is just another case of the banks making money off punters b/c they can - pricks!
Commenting is closed

 

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 ▲3.15 ▲3.55 ▼3.75
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.55 ▲2.95 ▼3.15
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 ▲2.29 ▲2.69 ▲2.99
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 ▲2.89 ▲3.29 ▲3.49
SBS Bank Special - ▲2.39 ▲2.79 ▲2.99
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.78 2.99 3.29

Last updated: 5 August 2021 9:02am

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