ANZ have restarted the mortgage skirmishes, and in earnest.
The country's largest mortgage bank has cut its one year fixed rate to 2.55%.
And their new 18 month rates is now down to 2.65%.
Both of these new rates are market leading. The new one year rate matches the Bank of China's already low rate at this level. Their new eighteen month rate at 2.65% is a level already occupied by ASB, Bank of China, China Construction Bank and HSBC, all as the lowest for that term.
Further, they have trimmed their 6 month, two year and three year fixed rates although none of those are market-leading.
At the same time, ANZ has cut between -5 bps and -10 bps from almost all its term deposit rates.
And it is also worth noting that so far, no main bank, in fact no other bank, has followed Kiwibank with its full and impressive -1.00% cut to its floating rate.
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 July 8, 2020 | % | % | % | % | % | % | % |
| ANZ | 3.55
 |
2.55
|
2.65
|
2.69
|
2.79
|
4.15 | 4.25 |
 |
3.55 | 2.69 | 2.65 | 2.69 | 2.99 | 3.09 | 3.19 |
 |
4.29 | 2.65 | 2.69 | 2.69 | 2.99 | 2.99 | 2.99 |
 |
3.55 | 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 | 2.65 | 2.65 | 2.80 | 2.89 | 2.99 |
| Co-operative Bank | 2.69
|
2.69
|
2.75
|
2.75
|
2.99
|
3.19
|
3.29
|
| Heartland Bank | 2.89 | 2.97 | 3.39 | ||||
| HSBC | 2.95 | 2.60 | 2.65 | 2.65 | 2.80 | 2.89 | 2.99 |
| ICBC | 2.95 | 2.58 | 2.79 | 2.68 | 2.79 | 2.99 | 3.445 |
 |
3.89 | 2.79 | 2.89 | 2.89 | 3.39 | 3.79 | 3.89 |
[incl Price Match Promise] |
3.39 | 2.55
|
2.65 | 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.
Fixed mortgage rates
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51 Comments
At some point in the future with rates continuing to drop, they are almost going to be paying people to take out loans. Will only push up house prices IMO, as people can afford to service a larger mortgage, and pay more. Oder people with savings, are now caught between a rock and a hard place if they want to earn retirement income from their savings.
At some point in the future with rates continuing to drop, they are almost going to be paying people to take out loans.
Possibly. Do you have an example of anywhere else in the world where the cost of servicing mortgage is zero? I think I once saw an example in Denmark.
Negative rates have been around a while. Sad I know, but I posted this four years ago. "Hans Peter Christensen got some unusual news when he opened his most recent mortgage statement. His quarterly interest payment was negative 249 Danish kroner.
Instead of paying interest on the loan he got a decade ago to buy a house in this northern Denmark city, his bank paid him the equivalent of $38 in interest for the quarter. As of Dec. 31, his mortgage rate, excluding fees, stood at negative 0.0562%."
https://www.wsj.com/articles/the-upside-down-world-of-negative-interest…
https://money.cnn.com/2015/04/22/investing/negative-mortgage-rates-euro…
Hows it possible to earn income off a loan and pay to service your TD. Very arse about face but why not take what's on offer if it ever happens. It's like picking free food off an avocado tree because if you dont and the avocado drops on the ground it just goes to waste.
Yeah and guess what, that Danish Jyske bank with it's negative mortgage rates isn't doing that well. Apparently their having to down play their losses. I bet in six months to a year from now it will have gone in to administration and will be looking to be bailed out by their government.
Reuters article: Denmark's Jyske Bank says first-quarter loss not as bad as it looks. "Denmark’s third-largest lender also on Tuesday downgraded its forecast for full-year net profit to 0 to 1.5 billion crowns, from a previous forecast of 1.8 billion to 2.2 billion crowns."
https://www.reuters.com/article/us-jyske-bank-results/denmarks-jyske-ba…
First of all it's the interest that is a cost not the principal payment as that is equivalent to savings. Secondly it's a demonstration for tenants they are servicing their landlords mortgage. Most landlords either have no mortgage or the rental is cashflow positive, there would be none that have a 100prcent mortgage. However the landlord continues to make money off the tenants rent, those tenants who are in a position to buy should do so for their own financial benefit. Are you aware that homeownership involves more than the cost of interest.
So instead you are happy for tenants to stay in rentals and supporting their landlord. As a landlord myself I find that is an excellent idea. Starting 2009 we used the GFC to buy rentals and haven't looked back, and thank all of our lovely tenants for their generous contributions (keep your hair on, its tongue in cheek). In fact our tenants say that we are good landlords who dont put the rent too high, and they invite us in for coffee and sometimes meals and we are sometimes privileged to be invited to their family events. I am not interested in taking advantage, I deeply want to see them save their money and move on to their first homes.
I'm glad to hear you're a good landlord housey. I once did the same thing with my tennants and purposely kept the rent lower so they could save and get their own house to which they openly thanked me for when they did buy.
Personally I struggle with the idea that we should all aspire to own umpteen rentals to 'get ahead'. But that's the way the system is set up I guess. The only winners are the banksters.
I'd much rather have my house worth a quarter of what it is and had it paid off 10 years ago and probably been retired within a year or two. Instead we're slave to the banksters. Which is a pretty shit system imo though
Personal choices is a mark of our freedoms and democracy. Freedom to buy a rental, as well as freedom to rent. Were not taking away others rights to buy a home, the properties we buy are multi-unit investor only material. I would be happy to be able to sell them to fhb but the gummint doesnt allow it. On tenants, many have stayed for many years and tell me that they never want to leave. When hearing that I cringe inwardly. On buying properties, it is all based on the potential cashflow and current values to calculate yields. Our return estimates are never based on capital gains as we buy for strong yield. We are not Ron Fong worshippers who says the cap gain gives the biggest return. Whenever I spoke to Ron he always gave me contrary advice to our actual investment appoach. Each to their own.
You need to go higher up ANZ's pricing team, when they come back with offers like that, if your loan is under 500k they won't fight as aggressively for your business. I refixed with them some rentals last month 2.49% 6 months LVR 28% from memory....
I do play one bank off against another, they undercut each other, and offer cash incentives etc
How readily are the banks actually advancing loans at the moment though? These increasingly lower rates might not be very accessibly in reality.
I've heard several reports that the banks are going through applications with a fine tooth comb. If they see the wage subsidy or if you have taken a mortgage holiday then no bueno.
There were a few comments on here over the last few weeks that banks are wanting 20% plus or even 30% deposit but I should imagine a lot will depend on your job and credit history too. We might be entering into the early stages of credit crunch of sorts.
I have borrowed during a credit crunch previously (UK) and provided you had about 25% deposit banks were still happy to lend, but they only offered the carded rates to those that had 40%+ deposit, which was basically existing home owners with an excellent credit history/score. I was offered 3.04% for 5 years with a 25% whereas someone with 40% equity was getting 1.8%.
The good news is that a credit crunch pulls prices down, so that whatever deposit a FHB has been saving, will become a bigger percentage deposit as home values decrease...so in such instances, waiting can really transform your financial position.
After the UK credit crunch, as with most housing markets globally, the market bottomed out at the point where investors were lured back by decent yields again. This then nudges values up again and before you know it values had begun an upward trajectory again. Prices took about 2 years to bottom, then they plateaued another few years and then they took off, but some people who had bought at peak were stuck in negative equity for much longer than that. The media referred to as "mortgage prisoners" as when their fixed rate period ended they could not get a fixed mortgage offer from any lender so were forced to stay at the floating rate.
I would hope they are still accepting those with lower deposits, but no debt and very secure jobs. It would be pretty disgusting to see good FHB loan applicants trying to get into the market, being even further disadvantaged. I know two couples that will be applying around november.
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