ASB drops low-equity fee

ASB - and Sovereign - has announced it will add a margin on any lending over 80% LVR.

For borrowers between 80% and 8%, the low-equity margin will be 0.3% per year. Between 85% and 90%, it will be 0.75%. Between 90% and 95%, it will be 1.3% and over 95% it will be 1.5%.

ASB said in a note to brokers: “The new low-equity margins reflect the costs associated with high-LVR lending. These include increased capital adequacy requirements on high-LVR lending imposed by the Reserve Bank of New Zealand.”

After six months, customers can apply for a reduction to a lower low-equity margin band or the removal of the margin with an updated valuation or when the loan balance drops.