Understanding the residential investor margin
A residential investor margin is an interest rate premium that may be applied to variable (floating) home loans that are for residential property investment.
Lending for residential investment property carries higher risk for us compared to lending for owner occupied property, and banks are now required to hold more capital for this type of lending. As part of this requirement, we’ve reviewed our pricing on residential investment property lending and have introduced a residential investor margin of 0.25% p.a. This will be added to the customer margin on any affected home loan and means that the agreed annual interest rate you pay will increase by 0.25% p.a.
Who is affected?
The residential investor margin will only apply if your variable home loans with us are for residential property investment. However, if your investment loans with us are also secured against the home you live in, the residential investor margin will not apply to any of your loans. This may change in the future. Take a look at some customer scenarios below to see if this might affect you.
Claire has two BNZ home loans for residential property investments. She also has another home loan for the house she lives in, but that is with another lender.
Both of Claire's home loans with BNZ are for residential property investment, so the residential investor margin will apply to both of these loans.
Joe has three home loans with BNZ. Two are for residential property investment and one is for the house he lives in.
Because Joe's investment loans are secured against his home, the residential investor margin will not apply to any of his loans with BNZ.
Jennifer has a BNZ home loan for the home she lives in. She is also a director for a company that has two property investments financed with BNZ.
Even though Jennifer has a BNZ home loan for the house that she lives in, the property investment loans for her company are not secured against her home and therefore both investment loans will be subject to the residential investor margin.
When will it take effect?
If the residential investor margin affects you, we have sent you a letter advising you of how the margin will impact your home loan. The margin will take effect on 1 January 2017.
If you make changes to your home loan before this date, the residential investor margin may apply sooner.
What do I need to do?
We have sent you a letter, with an attached Home Loan Summary, that identifies if your home loans will be affected by the residential investor margin.
If the information provided is correct, you don't need to do anything. However, if you believe the information provided in the Home Loan Summary is incorrect, or you have further questions about these changes, please call us on 0800 275 269.