Banks Creativity Keep Homebuyers In The Market

We all knew it wouldn’t be long before the Banks used the RBNZ LVR restrictions to their advantage.  Westpac have come up with some creative loans deals.  If you’re a low deposit lender (i.e you don’t have the twenty percent deposit) then you have to pay more interest.

Low equity borrowers will pay 6.55 per cent per annum fixed over two years compared to the standard rate of 5.95 per cent per annum.

Source

Conversely those borrowers with twenty percent or more deposit and will get their salary paid into their mortgage account would get a better deal on the floating rate.

The bank also announced a cut to its standard floating rate to 5.64 per cent for those with 20 per cent or more equity and who get their salary paid into a Westpac account.
The rate is 11 basis points lower than its choices floating rate of 5.75 per cent and 60 basis points lower than its standard rate of 6.24 per cent.

Source

Property investors are well versed with loan splitting  so while any drop in interest rate is good news many investors are in the know and have great deals with the existing loan providers.

The key to any deal on offer now by the banks is what it means to the First Home Buyer.  How creative will the Banks be in 2015 to secure the new business?  The RBNZ is really incentivising the Banks to go after the property investor business where the LVR restrictions are less of a barrier.

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