The questions and original answers

If your priority is the lowest total cost (not just the lowest advertised interest rate), I would usually start by comparing the major banks and a few lower-cost alternatives rather than choosing a lender based on brand. For a first rental property in New Zealand, the “best” lender often depends on your equity position, income, existing home loan structure, and how much you value flexibility. Investor lending is also affected by Reserve Bank rules, including tighter LVR settings than owner-occupier lending. Reserve Bank of New Zealand

My shortlist would be:

1. Kiwibank — often worth checking for cost-conscious borrowers

Why consider it

• Can be competitive on advertised rates.
• A New Zealand-owned bank, which some borrowers prefer.
• Often simpler product structures, which can reduce unnecessary fees.

Potential downside

• May not always be the most flexible lender for complex investment structures (multiple properties, unusual income, trusts, etc.).

Best fit: A straightforward first rental purchase where you want a low-cost, simple mortgage.

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2. BNZ — strong for investors wanting flexibility

Why consider it

• Has dedicated property investment lending options.
• Good online banking and loan management tools.
• May suit investors who want to split loans (for example, different fixed terms or some revolving credit). BNZ

Potential downside

• You may need to negotiate to get the best pricing rather than accepting the carded rate.

Best fit: Someone buying their first rental but expecting to build a portfolio.

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3. ANZ New Zealand, ASB Bank, and Westpac New Zealand — include them in every comparison

Why consider them

• Large lenders competing heavily for mortgage business.
• Often able to offer discounts, cashback, or sharper pricing when there is a strong application.
• Good choice if you already have your owner-occupied mortgage with one of them and can negotiate a package.

Potential downside

• Big-bank convenience does not automatically mean lowest cost; you still need to negotiate.

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4. Smaller lenders / non-bank lenders — only if they solve a problem

Examples include specialist lenders such as Pepper Money New Zealand. They can be useful for borrowers who do not fit standard bank criteria, but their pricing is often higher than mainstream banks. Pepper Money

Best fit: Complex income, self-employment, unusual property, or difficulty meeting bank servicing rules — not usually the first choice if your only goal is lowest cost.

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What I would focus on to minimise your total cost

1. Negotiate the interest rate

A difference of even 0.25% on a large loan can outweigh small fee differences.

For example:

• $500,000 loan
• 0.25% lower rate
• roughly $1,250 less interest per year initially (before considering repayments and loan structure)

2. Compare the whole package, not just the rate

Ask each lender:

• What investor rate can you offer?
• Is there a cash contribution/cashback?
• Are there annual fees?
• Are there low-equity margins?
• Are there break costs if we refinance?
• Can we make extra repayments without penalties?

3. Avoid cross-securing your home unless there is a clear benefit

Because you already own your home, a lender may suggest using your home as security for the rental purchase. This can help approval, but it can also tie the two properties together and make future refinancing or selling more complicated.

4. Consider using a mortgage adviser who can actually compare lenders

For a first investment property, a good adviser can sometimes save more through negotiation than the difference between advertised rates. Make sure they compare several lenders rather than only their preferred panel.

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My practical ranking for a cost-focused first rental buyer

1. Kiwibank — check for a simple, low-cost structure
2. BNZ — strong all-round option for investors
3. ANZ / ASB / Westpac — very competitive if you negotiate
4. Smaller banks/credit unions — worth checking if they beat the above
5. Non-bank lenders — mainly if mainstream banks do not fit

I would not pick a lender until you have obtained at least 3 written offers and asked each one to beat the others.

If you tell me:

• approximate rental property price,
• your available deposit/equity,
• your current home mortgage balance,
• whether you want interest-only or principal-and-interest,
• and whether you are PAYE or self-employed,

I can narrow this down to the lenders most likely to be cheapest for your situation.