Quick links

• We’re changing the terms of your home loan(s)
• We’re transferring your Classic home loan(s) to Standard home loan(s)
• Confirming your identity as a business cardholder
• Classic/Standard home loans with monthly repayments
• Classic/Standard home loans with weekly or fortnightly repayments

We’re changing the terms of your home loan(s) 

This information is for you if you’ve received a letter(s) titled ‘We’re changing the terms of your home loan(s)’. Please note, you’ll get one letter for any home loan(s) that you hold individually and/or jointly. You’ll also receive a separate letter for any loans held by each entity type, e.g. sole trader, partnership, company, or trust. Here’s some more information about these changes.

Topics

• Updated Home Loan Facility Master Agreement (FMA)
• Transferring from Classic to Standard
• How does the 5% threshold work?
• Interest Rate Types (‘Residential Owner Occupied’ and ‘Residential Investor’)
• Removing Flybuys
• Additional questions

Updated Home Loan Facility Master Agreement

Why are my loans being moved to the June 2024 Facility Master Agreement?

There’s content that is no longer relevant in the Facility Master Agreement, which has been removed from the June 2024 version. All loan agreements dated on or after 17 June 2024 are already on this version.

What are the key differences between the old versions and the new June 2024 version of the Facility Master Agreement?

Depending on which Facility Master Agreement (FMA) you are moving from, the differences between your current FMA and the June 2024 FMA will be as follows.

If your current FMA is dated May 2024, the changes are the removal of wording related to:

• Tailored in clause 14
• BNZ Advantage in clause 15
• Flybuys in clause 16

If your current FMA is dated December 2023, the changes are the removal of wording related to:

• Tailored in clause 14
• BNZ Advantage in clause 15
• Flybuys in clause 16; and
• Redraw in clauses 14.11 and 14.12.

What is redraw?

If your loan is on the December 2023 version of our Facility Master Agreement (FMA), in clauses 14.11 and 14.12, you were able to apply to ‘redraw’ your loan.

This means, if you had a term home loan and were paying it down faster than you needed to, you could have applied to re-borrow some of these funds.

In your new June 2024 FMA, we’ve removed references to ‘redraw’ and updated the clause numbering to reflect this change. This means you’ll no longer be able to apply to redraw an amount under a loan.

There are still other ways to access equity in your home. You can talk to us about your financial goals, and we’ll help find the best option for you. You can also find more information on our home loans here . All home loans are subject to our lending criteria (including minimum equity requirements).

What happens to my loans that aren’t moving to the June 2024 Home Loan Facility Master Agreement?

If you have a loan that’s not moving to the June 2024 version of the FMA, it will stay on the current version, and we’ll be in touch again when we’re ready to move these home loans onto the new FMA.

Only loans whose account numbers are included in the ‘moving to the June 2024 Home Loan Facility Master Agreement’ section of the table at the top of the letter will be moving to the June 2024 FMA at this stage.

Make sure you read your letter carefully as other sections of the letter may apply to any loan which hasn’t yet been moved to the new FMA. Any home loan agreements dated on or after 17 June 2024 will already be on the June 2024 FMA.

Will I need to sign anything?

No. We’ll automatically make the changes on 2 November 2024.

Transferring from Classic to Standard 

Why am I being moved off Classic home loans? 

As part of our ongoing work to simplify our home loans, we’ve reduced the number of home loan types available. As a result, our Classic home loan was removed from offer on 19 September 2024.

Since Classic home loans are no longer available, we’ll be transferring these loans to our Standard home loan. Standard loans come with the benefit of the 5% threshold, which Classic loans don’t have.

We’ve also reduced our advertised Standard home loan base rates to match our Classic home loan rates.

Compare our home loan rates 

Will my interest rates be impacted by these changes? 

No. Your interest rates will not increase as a result of these changes. However, variable interest rates are always subject to change at any time. 

How can BNZ move my home loan from Classic to Standard? 

Clause 4.4 of the Home Loan Facility Master Agreement (FMA) says that if your type of home loan is no longer available, we can choose to transfer you to another type of home loan. 

What if I don’t want to move to a Standard home loan? 

If you don’t wish to move to our Standard home loan, you need to contact us by 31 October 2024 to discuss your options. Otherwise, on 2 November 2024, your impacted loan(s) will automatically be moved to a Standard home loan. You can’t opt out of this change after 31 October 2024, but as always, you can choose to transfer to another available home loan type.

If you choose to end your agreement or repay or refinance your home loan during a fixed rate period, you may have to pay an early repayment charge. If you do this while on a Classic home loan, you won’t receive the benefit of the 5% threshold.

Compare our home loan types 

How does the 5% threshold on Standard home loans work? 

We will not charge you an early repayment charge if the effect of all early repayments you make in any consecutive 12-month period within a fixed rate period is less than or equal to the ‘5% threshold’. We calculate the 5% threshold as 5% of the outstanding principal amount at the start of the fixed rate period. The first 12-month period starts on the first day of the fixed rate period.

In addition, the early repayment charge is only payable to the extent that the effect of the early repayments is more than the 5% threshold.

As a simplified example, for a 1-year fixed rate Standard home loan with a balance of $400,000 at the beginning of the fixed rate period, the 5% threshold would be $20,000. An increase in repayments of $1,000 a month would be $12,000 in that consecutive 12-month period. Since $12,000 is under the $20,000 threshold, there wouldn’t be any early repayment charges for this particular 1-year fixed rate period.

However, an increase of $2,000 a month would be $24,000. This is over the 5% threshold of $20,000, so an early repayment charge would apply on the amount above the 5% threshold.

If you choose to end your agreement or repay or refinance your home loan during a fixed rate period, you may have to pay an early repayment charge. If you do this while you’re still on a Classic home loan you won’t receive the benefit of the 5% threshold.

If you’re registered for Internet Banking or the BNZ app, you can see whether an early repayment charge (which takes the 5% threshold into account) may apply by clicking your home loan account and selecting either ‘change your regular repayments’ or ‘make a lump sum payment’. 

How to change your home loan repayments 

How to make a lump-sum payment 

More information on the early repayment charges and the 5% threshold

Can I still increase my repayments at the time I re-fix my home loan and would this use some of the 5% threshold?

Any increase of payments that take effect in a fixed rate period will count towards the 5% threshold. However, you may choose a higher repayment amount when you’re re-fixing your loan, and that higher repayment amount will take effect on the same day your new fixed rate takes effect. Where the higher repayment amount takes effect on the same day as the new fixed rate begins, this won't count towards the 5% threshold.

If you’re using any of our digital tools, such as re-fixing your home loan on Internet Banking, we’ll always let you know if there’s an early repayment charge (ERC) to pay. The ERC will always take into account the 5% threshold.

You can check to see whether an early repayment charge may apply by logging into Internet Banking or the BNZ app, selecting your home loan and clicking on ‘change my repayments’ or ‘make a lump sum payment’. The early repayment calculation will take into account the 5% threshold if you’re looking to increase your repayment or make a lump sum payment during a fixed-rate period.

Do early repayment charges apply to loans on variable rates? 

No, additional payments can be made without early repayment charges at any time while on a variable rate. If you are moving from a Classic variable home loan to a Standard variable home loan, you will still be able to make additional repayments without having to pay an early repayment charge. 

Aren’t Standard fixed interest rates usually higher than Classic fixed interest rates? 

As part of simplifying our home loan products, on 20 August 2024, we lowered our Standard home loan interest rates to match those of our Classic interest rates.   

Compare our home loan rates 

 

Base Interest Rate Types (‘Residential Owner Occupied’ and ‘Residential Investor’) 

Will my interest rate change because of the removal of these base interest rate types?

No. Removing Residential Investor (RIN) and Residential Owner-Occupied (ROO) will not increase your interest rates in any way.

Will the removal of base interest rate types affect the ability to offset my mortgage with my TotalMoney home loan?

No. Removing RIN and ROO won’t affect your ability to offset your mortgage if you have a TotalMoney home loan.

What is the base interest rate?

Currently, we have two base interest rate types (Residential Investor (RIN) and Residential Owner-Occupied (ROO)) depending on how a loan was secured. RIN and ROO rates have largely been the same for some time now, which is why they’re being removed. They have not been included in new loan agreements since 5 September 2024.

From 2 November 2024, there will be only one base interest rate for each type of BNZ home loan:

• For Standard home loans, this is the base interest rate for Standard Housing Loans, which may be variable or fixed.
• For Rapid Repay home loans, the base interest rate is the variable interest rate for Rapid Repay Housing Loans.
• For Mortgage One home loans, the base interest rate is the variable interest rate for Mortgage One Housing Loans.
• For TotalMoney home loans, the base interest rate is the variable interest rate for TotalMoney home loans.

Compare our home loan rates 

Learn more about RIN and ROO rate types 

How will I know what the base interest rate type is for each of my home loans?

You can find the base interest rate for each of your home loan types in the ‘Changes to the letter(s) of advice’ documents included with your letter.

Compare our home loan rates 

Will you still collect residential property occupancy information (i.e. whether a property is owner-occupied or investment)? 

Yes, this is a regulatory requirement.  

Will minimum equity requirements still apply to loans secured by a residential owner occupied, or residential investment property? 

Yes, minimum equity requirements may apply.  

Typically, lending secured against an owner-occupied property will need a 20% deposit, while lending secured against residential investment properties currently requires a 30% deposit. A low equity interest rate premium may apply for deposits less than 20%.   

See more information about deposits and loan to value ratios 

 

Removing Flybuys from Standard home loans

With Flybuys going, can I earn any other rewards through my Standard home loan?

No. From 17 June 2024, we amended our contracts to remove the ability to earn Flybuys on new Standard home loans.

If you’re already earning Flybuys, you can only earn them up until 31 October 2024. You will then have until 31 December 2024 to spend them before they expire.

 

Additional questions

If I have loans that are moving from Classic to Standard, what changes are being made to my loan terms and conditions?

As part of transferring from Classic to Standard, there are several changes being made to your home loan’s Terms and Conditions: 

• With a fixed-rate Standard home loan, you’ll receive the benefit of the 5% threshold. You can read more about the 5% threshold above and in clause 9.8 of the Home Loan Facility Master Agreement (FMA).  
• The removal of ‘base interest rate types’, known as Residential Investor (RIN) and Residential Owner-Occupied (ROO). From 2 November 2024, Standard home loans will only have one type of base interest rate, which is the base interest rate for Standard Housing loans, which can be either fixed or variable. 
• Unless you are already on the June 2024 version of our FMA, we will be moving your impacted loan onto our updated June 2024 FMA. You can read more about the updated Home Loan Facility Master Agreement above.

What changes are being made to my loan terms and conditions for any impacted RapidRepay, Mortgage One, TotalMoney and/or Standard home loan(s)?

• The removal of ‘base interest rate types’, known as Residential Investor (RIN) and Residential Owner-Occupied (ROO). From 2 November 2024, home loans will only have one type of base interest rate for each kind of BNZ home loan.
• For impacted loans, unless you are already on the June 2024 version of our FMA, we will be moving your loan(s) onto our updated June 2024 FMA. You can read more about the updated Home Loan Facility Master Agreement above.
• The removal of Flybuys for Standard home loans.

Why are my loans excluded from certain changes set out in the letter if I make a change between 30 September 2024 and 1 November 2024 (inclusive)?

We’re giving you advance notice of the changes. If you take one of the actions outlined in your letter during the notice period between 30 September and 1 November (inclusive), that could result in you receiving information from us that is inconsistent with the changes happening on 2 November 2024.

Why does my letter not cover all my loans? 

You’ll get one communication for any impacted home loan(s) that you hold individually and/or jointly. You’ll also receive a separate communication for any loans held by each entity type, e.g. sole trader, partnership, company, or trust.  

There will also be home loans that are excluded from these changes for now. Loans excluded include: 

• Loans where you’ve signed your contract but haven’t drawn down the loan as of 30 September 2024.  
• Most loans that are scheduled to end before the changes take place on 2 November 2024.  
• Loans that have a loan agreement dated on or after 5 September 2024, as the base interest rate types of Residential Investor (RIN) and Residential Owner-Occupied (ROO) were removed from new agreements from this date.

Classic home loans with an agreement dated between 5 - 18 September 2024 will move to a Standard home loan at a later date. We will write to you again and let you know when that will take place.

If you are concerned that you have a loan not covered by the above reasons, please contact us and we can discuss your specific loan details and why it may not be included in these changes.

What if I make a change to my home loan(s) on or after 2 November 2024?

Any change that you make will be processed in the usual way. The changes detailed in your letter will be effective on 2 November 2024. This means any amendments you make to your home loan(s) after this date will take these changes into account.

What are the other changes BNZ is making?

As part of simplifying our home loans, we’ve made several changes. Some of these include: 

• Updates to our Facility Master Agreement (FMA).  
• Notifying you that interest will always be charged based on the actual number of days in any repayment period. This is referred to as ‘daily interest charges’ in the Home Loan FMA – see clause 14.10(a). These changes are being made over time, so you may have already heard, or are yet to hear, from us about these. 

We have also made changes due to other events, such as the closure of Flybuys.

Confirming your identity as a business cardholder

From 2 October, we began contacting cardholders to confirm their identity, so we can meet our legal obligations to verify personal details for all cardholders.

To provide cardholders with confidence that the email was sent by BNZ, the email included the last four digits of each business card.

How to confirm your identity

To help us verify your identity, please follow the instructions in the email we sent you.

If you currently live in New Zealand, providing your identification using RealMe or photo verification is the best option for you. You can also visit any BNZ branch if you’d prefer to do this in person. If you’re living overseas, we recommend providing your identification on our website.

Find our identification requirements – and please check that your identification is suitable before submitting it. Remember that BNZ will never ask for your full card number(s) or ask you to follow links to log in to banking applications.

How we use this information

Under the Companies Act 1993, the Anti-Money Laundering and Counter-Terrorism Act 2009, and the Financial Transactions Reporting Act 2009 (among other New Zealand and international laws), BNZ must hold verified personal information for all customers, including business corporate cardholders.

We have a process in place that will delete any information from our systems once it is no longer required. In general, this happens seven years after the end of our relationship. More information can be found in our Master Privacy Policy.

Blocked cards

This information is required for BNZ to meet its legal obligations. If you’re not able to supply it, your card will need to be blocked, and then closed.

If your card is blocked, it’s because we haven’t been able to verify your ID.

If you supply this information using one of the methods in the email we sent you, we’ll be able to unblock your card within five working days.

Further support

If you have any other questions, you’re unable to provide us with this information, or need assistance to identify the outstanding card(s), please ask your employer to talk to their relationship manager, or email us at bnz_cardsKYC@bnz.co.nz

Changes to the way we calculate interest for Classic/Standard home loans with weekly or fortnightly repayments

Starting from 5 May 2024

This information is for existing customers on our Classic or Standard home loans with weekly or fortnightly repayments. If you receive a letter from us, there’s nothing you need to do – but here’s some more information about the change.

Weekly or fortnightly repayments

If you make weekly or fortnightly repayments, we calculate interest based on the number of days in those repayment periods (7 or 14 days respectively). This isn’t changing.

Your interest rate, number and amount of repayments, and final repayment are not changing.

If you change to monthly repayments

The only thing that’s changing is that if you switch to monthly repayments in the future, interest will be calculated based on the number of days in that repayment period.

Previously, we used ‘periodic interest charges’ for monthly repayments which means the interest was ‘smoothed’, or evenly divided, across the 12 months in a year. To calculate that, we multiplied your daily interest charges by the average number of days in a month.

If you change to ‘interest-only’ monthly repayments

If you change from weekly or fortnightly repayments to interest-only monthly repayments during an interest-only period in the future, you’ll see a difference in the amount you pay each repayment period. This is because interest will be calculated based on the actual number of days in each month. So your interest-only payments would be higher in months with 31 days like October, and lower in months with 30 days like April.

If you change to ‘principal and interest’ monthly repayments

If you change from weekly or fortnightly repayments to monthly repayments in the future, and pay principal and interest, your total repayment amount will still be the same each month. 

Other home loans

If you have a Classic or Standard home loan on monthly repayments that started before before 5 May 2024, we’ll be contacting you separately.

TotalMoney, Rapid Repay, and Mortgage One home loans have always used ‘daily interest charges’ so those won’t change.

Why we’re making this change

We’re making this change to ensure our technology continues to evolve to meet the needs of our customers.

It’s important to let you know about any changes we make to your home loan documents, even if it doesn’t affect you right now. This is so that you’re aware of how we calculate interest, if you choose to switch to monthly repayments in the future.

If you have questions about this change, or about other changes to our products, contact us on 0800 275 269. If you’re a business customer, you can contact us on 0800 269 763 or talk to your BNZ banker.