BNZ is the latest bank to push through home loan rate cuts.
Their website this morning shows cuts to most Classic fixed rates.
They are matching ASB and Westpac with a 3.05% one year fixed rate, choosing not to match ANZ and Kiwibank at 2.99%.
And they are matching ASB and Westpac for all rates from two years to five years fixed, and that includes the 2.99% level for two years.
At the same time, BNZ have cut their term deposit rates for almost all terms.
BNZ's move lower completes the current cycle of home loan rate cuts by themain banks, a cycle that was started by Kiwibank.
No main bank is taking on HSBC who made steeper reductions yesterday.
HSBC's one year fixed becomes 2.80%, a fall of -15 bps, matching China Construction Bank and almost matching the market-leading 2.79% rate from the Bank of China.
Their new eighteen month rate becomes 2.85% which is a reduction of -10 bps and becomes the market-leading rate for this term.
And their new two year rate becomes 2.89%, a fall of -20 bps but not quite matching China Construction Bank's 2.85% rate for this term.
They also cut their six month fixed rate by -15 bps to 3.49%.
All these rates are for their Premier offer which comes with minimum conditions.
BNZ's new rates are effective today. But HSBC's won't be available until Thursday, May 21.
Here is the full snapshot of the advertised lowest fixed-term rates on offer from the key retail banks at this time.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at May 15, 2020 | % | % | % | % | % | % | % |
| ANZ | 3.65 | 2.99 | 3.20 | 3.25 | 3.99 | 4.75 | 4.85 |
 |
3.89 | 3.05 | 3.25 | 2.99 | 3.69 | 3.79 | 3.89 |
 |
4.79 | 3.05
 |
3.05 | 2.99
|
3.39
|
3.49
|
3.59
|
 |
4.29 | 2.99 | 3.39 | 3.65 | 3.99 | 4.09 | |
 |
4.79 | 3.05 | 4.25 | 2.99 | 3.39 | 3.49 | 3.59 |
| Bank of China | 3.89 | 2.79 | 2.89 | 2.89 | 3.19 | 3.79 | 3.89 |
| China Construction Bank | 4.70 | 2.80 | 2.85 | 3.19 | 3.30 | 3.45 | |
| Co-operative Bank | 3.09 | 3.09 | 3.35 | 3.35 | 3.69 | 3.79 | 3.89 |
| Heartland Bank | 2.89 | 2.97 | 3.39 | ||||
| HSBC | 3.49
|
2.80
|
2.85
|
2.89
|
3.50 | 3.60 | 3.70 |
| ICBC | 4.29 | 3.18 | 3.18 | 3.18 | 3.20 | 3.99 | 3.99 |
 |
3.89 | 3.09 | 3.39 | 3.39 | 3.69 | 3.79 | 3.89 |
 |
3.89 | 2.89 | 3.35 | 3.35 | 3.69 | 3.79 | 3.89 |
In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%.
Fixed mortgage rates
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8 Comments
Exactly, StuckAtHome. Note though that the RBNZ has dropped the Core Funding ratio requirement, which means that NZ banks can now rely less on NZ depositors. This means that NZ banks will have to rely more on international funds. Orr has not learnt one of the basic lessons of the GFC - it takes NOTHING for this international money to become predatory (much higher rates) or just disappear altogether. This happened almost overnight during the GFC.
A very risky move, and a run on the banks can't be excluded if the RBNZ persists on these dangerous attitudes. I have already moved some of my money overseas, and I am leaving very little as deposits with NZ banks. Why would any sane investor keep money at such low rates in a NZ bank, with no deposit guarantee, is something that defies logic.
Take your funds to an overseas destination to take advantage of the exchange rate, by all means. But not for fear of creditworthiness.
And to where? Don't tell me - Australia!
To put the money on deposit with the same banks that are 'our' banks, no doubt.
"But they have a A$250k Depositor Guarantee!". Sure they do. And if the time ever comes for them to have to exercise that guarantee deposits will be worthless; ie: If one of their Big 4 goes down, The System will have collapsed. It won't matter what sort of Guarantee you think you have. (Blood out of a stone, comes to mind)
The same applies here. There may not be a specific guarantee, but none of Australian ( or Dutch) banks is going to let any of their offshore subsidiaries or branches fail. It would wreck the name and imperil the deposits of the parent back home, and that would trigger all sorts of issues.
Think about it.
What do you reckon would happen to the fund rating capacity of, say, ANZ Melbourne if it let its New Zealand subsidiary fail?
No one would lend to ANZ Melbourne; retail or interbank, because they'd have seen that they will walk away from their commitments if needs be, and IF they could borrow at all, it would be at a massive premium to wherever its peers might be able to attract funds at.
Not going to happen.
Look at it another way.
If ANZ NZ, say, fails, it will liquidate its assets - call in all the loans it has outstanding, and if those can't be refinanced with another bank, it will call in the collateral. As they're our biggest mortgage lender, do we think tens/hundreds of thousands of properties will be put on the open market because they can't be refinanced? No.
Yvil, you are a very wise person.
The problem with many people in NZ is that they leave school and they think that they have an education.
Yes they may know how to use a calculator, use a computer and generally how to read and write and that has taken them 11 years or more to learn.
What they haven’t learnt is how to become financially independent well before retirement age.
They get a job and hang out each and every week for their salary or wages to be credited to their account.
What they should be learning is how to get ahead without having to get out of bed at 7.0am every morning for 45 years or so.
What I can comfortably say is that there are far better ways to live and not be reliant on the taxpayer when they hit 65 years of age.
The property bears can mean and groan as much as they like but they will not achieve what they could if only they get in the ear of professional successful property investors.
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