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Mortgages

Mortgage Rates Daily Commentary
Monday 13 July 2020  Add your comment
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ANZ becomes more aggressive with low equity loans

ANZ, which is the last of the big banks to keep a two-tiered pricing structure for its home loans, has taken a half step to change this model.

Wednesday, April 23rd 2014, 10:53AM 3 Comments

It continues to have a higher interest rate for its low equity loans but has reduced the threshold this kicks in from an 80% LVR to 90%.

Its says, on its website, that this change applies to new fixed rates where the deposit or equity in the deal is 10%.

It does not apply to loans which are exempt from the Reserve Bank’s LVR restrictions including refinancing from another bank.

Home loans at 90% or higher LVR have an interest rate 50 basis points higher than standard rates amd all loans above 80% LVR also incur the cost of a low equity premium.

It does not display low equity rates on its website.

  • Loans with a deposit of 20% or more will be charged the carded rate (or a rate the borrower negotiates).
  • Loans with a 10% to 20% deposit will be charged from the carded rate card, plus the low equity premium.
  • Loans with less than a 10% deposit will be charged the carded rate, plus 0.50%, plus the low equity premium.

That low equity premium is additional to the higher interest rate and applies to all loans above 80% LVR. It applies on a variable scale – see table.

ANZ says it charges low equity fees "to recover the extra costs it incurs when lending above 80% of a property's value

LVR ratio % of loan amount
80.01 - 85.00% 0.25%
85.01 - 90.00% 0.75%
Over 90.01% 2.00%

 

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Comments from our readers

On 23 April 2014 at 11:52 am Mike Hardy said:
In other words, the more money they are making out of you, the more they want on top up front for the pleasure of making all that extra money out of you. Their low equity fee was 0.25% across the board before the restrictions, they increased this to the 2% overnight under the radar when the restrictions hit, which is why we have a mortgage elsewhere. Put in perspective, if you have a ten percent deposit for a $400'000 property (40 grand) you need another $8000 on top of that, and this is before all the extra interest rates and actual mortgage fee's, so you probably need to save 10% of $500'000 to be able to afford a property that is 20% cheaper. I don't even want to get into how much money you are then paying the bank in interest
On 23 April 2014 at 1:54 pm suzyt said:
Id be interested to hear some expert advice on whether the low equity charges are justified. Do all banks charge accordingly or just some/ANZ?
On 24 April 2014 at 12:40 pm Hamish McPhail said:
Well put Mike

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone 4.44 4.44 4.44 4.44
BNZ - Classic - ▼2.55 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

Last updated: 13 July 2020 7:38am

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