MORTGAGE TYPES
For many buyers, this can actually be a smart alternative to paying a large one-off low equity fee. If you plan to pay down your loan quickly or add value to the property through renovations, the overall cost of a low equity margin can be significantly lower over time.
In most cases, the margin stays in place until your fixed rate comes up for renewal. Even if your loan drops below an 80% loan-to-value ratio (LVR) during the fixed term, the margin usually can’t be removed unless the loan is restructured, which may involve break costs. One notable exception is ASB, which allows the margin to be moved mid fixed term once sufficient equity is reached.
Typically, low equity margins sit around 0.25%-0.35% for loans between 80% and 85% LVR. For lending between 85% and 90% LVR, margins can increase to around 0.75%.
Low equity margins are added on top of the bank’s standard or negotiated interest rate.
A margin can be a smarter alternative to a large one-off low equity fee, especially if you plan to build equity quickly.
0.25%-0.35% for 80-85% LVR, increasing to around 0.75% for 85-90% LVR — added on top of your rate.
Usually stays until your fixed term renews. ASB is a notable exception, allowing mid-term removal once equity is sufficient.
The margin usually can’t be removed mid-term unless the loan is restructured, which may involve break costs.
Even if your LVR drops below 80% during a fixed term, the margin typically remains until renewal.
Low equity margins are added on top of the bank’s standard or negotiated interest rate.
At Caldwell Mortgage Advisers, we:
We determine your loan-to-value ratio and what margin may apply to your situation.
We compare how different banks handle low equity margins to find the best option.
We help you plan how to build equity and reduce or remove the margin over time.
Want to understand your low equity options? Get started today.
