Our big, Australian-owned banks are making more money out of New Zealand customers than those across the ditch - raising questions about whether Kiwi customers are being treated fairly.
The difference means a Kiwi pays more than $20,000 extra over the lifetime of a $400,000 mortgage.
Banking commentator Claire Matthews said banks were charging New Zealanders more, "arguably just because they can".
"I'm not saying that is the reason but it's an argument some would use. There's a question to be asked there."
The profit margins can be seen by looking at what banks lend money for - compared with how much they borrow for. The "net interest margins" clearly show New Zealanders are being charged more than Australians.
PricewaterhouseCoopers' recent report on the banking sector said Kiwi banks were operating with an average margin of 2.25 per cent, compared with Australia's average of 2.12 per cent. Some Australian banks have lending margins as low as 2.02 per cent. It said Australia's margins had fallen over recent years, partly because the banks there have had to compete more aggressively for deposits, offering higher rates to savers.
But New Zealand banks have found it easier to get customer deposits and have done well out of the number of people on floating rates.
About three-quarters of borrowers are still on floating rates or fixed for less than a year, so it is easy for banks to pass on any increases in borrowing costs.
Green party co-leader Russel Norman said it was disturbing. "It means they're effectively treating New Zealand as a profit centre and getting more out of us than in their home market.
"The big problem New Zealand has is that the big Australian banks are a significant drain on the New Zealand economy ... they make massive profits that come out of the pockets of ordinary New Zealanders."
Commentator Bernard Hickey said banks were still at profit margins well above where they were before the global financial crisis. "Banks are pretty much all at record profit levels. Consumers need to keep an eye on the net interest margins and use them as ammunition when they are negotiating a deal, either for a mortgage or a term deposit."
Sam Shuttleworth, PwC banking and capital markets sector leader, said customers should negotiate hard with their banks.
In Australia, where the official cash rate is 2.5 per cent, floating interest rates are available below 4.5 per cent. Here, with an OCR of 2.75 per cent, they are between 5.7 per cent and 6.5 per cent.
BNZ had the biggest difference in lending margin. In New Zealand, across all lending, the net interest margin is 2.33 per cent. In Australia, where BNZ operates as NAB, the margin is 2.02 per cent.
BNZ said NAB had a different mix of retail and non-retail customers. NAB is offering a variable rate of about 5.4 per cent to Australian customers at the moment. BNZ's rate is 6.19 per cent.
Westpac said no one was available to comment but described the higher margin in New Zealand as "a general trend". ASB said its Australian operations with CBA had a bigger proportion of non-retail businesses.
An ANZ spokesman said it was better to compare retail banking operations, where margins were virtually the same.
'They make enough'
ANZ customer Lisa Lyons said her carpenter husband Matt often complained about it being more expensive to borrow money in New Zealand than in Britain. The medical secretary said she was surprised to hear that there was also a difference compared with Australia.
"It's not fair if they're owned by the same company. [$20 a fortnight] adds up to a lot, over 30 years that's quite substantial, it's more than $20,000. They make enough money anyway, why would they need to do that?"