Bank of China launches a new all-time low home loan rate just as wholesale markets try and turn up after reaching their own record lows

A new low has been established for fixed home loan rates.

Bank of China has launched a 2.55% one year fixed offer.

In addition, they have cut 'special' rates across the board.

Their new 18 month and two year fixed rates now match HSBC at 2.65% as the market lows for each of these terms.

And their three to five year rates are new all-time market lows for these respective fixed terms.

While these rates are available for all qualified borrowers who meet the 20% equity threshold, the main banks may or may not match rates this low. But borrowers do have the option to choose them at Bank of China.

This new offer set comes at an interesting time. Wholesale swap rates have been rising in the past two or so weeks.

The one year swap rate reached its all-time record low of 0.18% on May 14, but has since risen to 0.26%.

The two year swap rate reached its low of 0.11% on May 19, but has since risen to 0.23%.

The three year swap rate reached to low of 0.10% on May 19, but has since risen to 0.30%.

Although not directly related to the home loan market, banks have seen the ten year swap rate at its record low of 0.59 on May 19 rise to 0.82% today.

And the market expectation is that these wholesale rises will continue. That will crimp what banks feel they can reduce or match in mortgage negotiations

One useful way to make sense of these new lower home loan rates is to use our full-function mortgage calculators. 

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options.

Here is the updated snapshot of the lowest advertised fixed-term mortgage 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 June 5, 2020	%	%	%	%	%	%	%
ANZ	3.65	2.79	3.05	2.95	3.35	4.45	4.55
	3.55	2.85	3.05	2.69	3.35	3.45	3.55
	4.29	2.79	2.79	2.69	2.99	2.99	2.99
	4.29	2.65		2.79	3.25	3.45	3.55
	4.79	2.79	4.25	2.69	2.79	2.99	2.99
Bank of China	3.45	2.55	2.65	2.65	2.75	2.85	2.95
China Construction Bank	4.70	2.80		2.85	3.19	3.30	3.45
Co-operative Bank	2.79	2.79	2.79	2.79	3.39	3.49	3.59
Heartland Bank		2.89		2.97	3.39
HSBC	2.95	2.60	2.65	2.65	2.80	2.89	2.99
ICBC	3.50	2.79	2.95	2.95	3.69	3.99	3.99
	3.89	2.99	3.05	3.05	3.69	3.79	3.89
[incl Price Match Promise]	3.39	2.79	2.79	2.69	2.79	2.99	2.99

In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%, which is unchanged in this update.