BNZ Simplifies Home Loan Offering, Delivering Savings For First Home Buyers And Low Equity Borrowers

In a move that will make borrowing simpler and more affordable for first home buyers and low equity borrowers, Bank of New Zealand (BNZ) today announced changes to its home loan offerings.

In addition to a raft of home lending interest rate reductions this morning, BNZ is moving to a single set of home loan fixed interest rates, simplifying its previous two-tier structure of Classic and Standard rates. This change removes the previous 0.60% difference in the rates available to borrowers with less than 20% equity.

New borrowers with less than 20% equity will benefit from the lower Standard fixed interest rates, resulting in reduced overall borrowing costs for these customers. Low equity premiums will continue to apply based on individual customers’ equity positions.

BNZ Executive Customer Products and Services Karna Luke says these changes will make a real difference for many New Zealanders.

“The simpler home loan rates mean that all customers will be able to access our best home loan rates, even if they don’t have 20% equity.

For example, a first home buyer borrowing $500,000 with a 15% deposit on a 30-year term would save $78 per fortnight based on the current 1-year fixed rate advertised on the BNZ website*. Over a 1-year fixed term, this amounts to savings of more than $2,000.

"These changes reflect our commitment to growing the long-term financial wellbeing of all New Zealanders,” says Luke.

“By making home loans simpler, we aim to help more Kiwis to achieve their home ownership aspirations.”

The new pricing takes effect from today for new customers and will apply to existing low equity customers when they next refix their home loan.

*1 year interest rate of 6.55% as of 20 August 2024.

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