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BNZ Targets Investor Market

Investor lending is on the rise and has prompted BNZ to drop its investor home loan rates to the same level as its owner-occupier rates.

By: Property Investor Team

1 March 2020

The bank rejigged its fixed and variable home loan rate offerings in late January, putting investor and owner-occupier rates on a level playing field.

That means investors are now able to take advantage of fixed home loan rates from as low as 3.39% per annum for 18 months and floating rates from 5.30% per annum.

At the time of going to print, oneyear rates are 3.49%, two-year rates are 3.55%, three-year rates are 3.89% and the 18-month rate is 3.39%. BNZ general manager home lending Martin Elliott says the bank wanted to offer “clear, compelling and competitive home loan rates” in the current market.

The bold move comes amid signs of a comeback for the investor market. In the last three months of 2019, new mortgage lending increased significantly, reaching a peak in November when investors recorded their highest borrowing figure for the year.

Investor borrowing remained very strong in December at $1.29 billion, up from $949 million in December 2018 and $1.06 billion in December 2017.

Craig Pope, of Pope & Co Mortgages in Wellington, says the BNZ cuts are a sign of increased competition for the investor market.

“As the investors have really come back into the market, it’s a big chunk of business potential for banks. Most investors are pretty rate savvy and likely BNZ could see investors refinancing away to other banks to get better deals.”

Kris Pedersen, of Kris Pedersenn Mortgages, says BNZ’s move could have been prompted by “a case of them losing market share”.

The good news is that the move will remain the status quo for the foreseeable future. A BNZ spokesperson confirms that the plan is for investor and owner-occupier rates to stay aligned going forward.

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