Low equity margin home loans explained.

A low equity margin is an additional interest amount that is added to your home loan interest rate when you borrow more than 80% of your property's value.

This margin is applied because lending more than 80% is a higher risk to us. This margin will stay in place for as long as you have less than 20% equity in your home and can be removed after arranging a review with us.

The amount of low equity margin that applies will depend on the Loan-to-Value ratio of your home, which is the amount you're borrowing, as a percentage of the value of the property you're buying. This can be calculated by dividing the total amount of your home loan by the value of your property, then multiply by 100 to get to your Loan-to-Value ratio. This will also help you work out how much equity you have in your home.

For example:

Value of property: $900,000
Total deposit amount: $150,000
Total value of the home loan: $750,000
750,000 / 900,000 = 83%

Your Loan-to-Value ratio: 83%
Your Equity in home: 17%

How Low Equity Margin is applied to interest rates:

Depending on your Loan-to-Value ratio a different low equity margin may apply, this is detailed in the table below.

^{*Westpac NZ may change the low equity margin, replace it with a new margin from time to time.}