When you’re looking to buy a home with less than a 20% deposit, the banks will charge you a Low Equity Premium, or Low Equity Fee. Recently, the main banks, Westpac, ANZ, ASB, and BNZ aligned the way they charge their fees, which makes things a little easier to understand.
Across the main banks, this fee is charged as a premium on the interest rate you’ll be paying on your home loan. The way
If you are looking to buy with less than 20% deposit, as low as 10%, then you will have some extra fees and charges. Do not stress about this, it is simply what is required to get yourself onto the property ladder. It is likely you will be using your KiwiSaver and potentially other grants as well. After you build up some equity, you can look to refinance onto lower rates and start saving money then.
iRefi.co.nz will set you up with the best deal then look to get you shifted onto the best deal available once you cross over 20% equity.