Kiwibank is offering people who have 20% or more equity in their property a two year fixed term loan that is 0.25% less than what they are offering borrowers with less than 20% equity.
This (amoung other rate changes) was partly in response to the Reserve Banks restrictions on low equity lending, which will see banks having to limit low value ratio (LVR) lending to no more than 10% of the value of their new housing lending.
Kiwibank has also said it will prioritise first home buyers over those who are buying investment property.
The BNZ on the other hand, has said it is unlikely to favour any particular group of borrowers for it’s high LVR lending allocation. Westpac has said it will favour existing customers.
Kiwibank also cut it’s low equity fees. These fees are a one-off charge that can be added to the mortgage so the borrow doesn’t have to cover it upfront, and is a percentage based fee ranging from 0.25% and 0.75%. This is in contrast to the increases announced by ANZ and BNZ.
A comparison of low equity margins and fees can be found here.