ASB makes home loan and term deposit changes, but leaves its floating mortgage rate unchanged. The timid changes reflect a timid housing loan market

Bank mortgage rate setting continues to surprise, following the two 2023 OCR increases from the RBNZ.

Today ASB raised some fixed rates for terms to 18 months, and lowered some for terms 3 years and longer.

The result is some minor changes to their rate card, but at no point are they market leading, or even anything other than mid-pack among their main rivals.

But they have chosen to hold their floating rate at 7.99%, a level that hasn't changed since November 2022. (Update: After this article was first published, ASB confirmed that it will raise its floating rate by +40 bps to 8.39% on April 27, 2023 for existing customers.)

ASB is not alone in holding the line with floating home loan rates. Among the main banks, neither BNZ nor Kiwibank have changed theirs either. Only ANZ and Westpac have.

At the same time, ASB has raised its term deposit offers for terms out to 2 years. Again, these offers are not remarkable and trail most rivals. But it hasn't boosted its savings account rates in the same way others have done. [Update: there are increases announced here too.]

The 'surprise' in this ASB change is solely in the lack of change to their floating mortgage rate. At 7.99% it is still +24 bps higher than Kiwibank, +25 bps higher than BNZ, and now -40 bps below both ANZ and Westpac. [See update above.]

Yesterday, wholesale swap rates rose sharply, up +10 bps in a day across the board. But from the start of the month, wholesale swap rates are up +31 bps for the one year duration, up +16 bps for two years, and up +8 bps for three years.

But with loan demand, especially mortgage demand, unusually low, sourcing funding is unlikely to be a priority. Depositor and saver inflows remain quite positive, so wholesale loan activity is only likely to be rollovers. So that will mean the margin between mortgage rates and savings/TD rates will be relatively more important for banks.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is also below. (Term deposit rates can be assessed using this calculator).

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. But break fees should be minimal in a rising market.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at April 19, 2023	%	%	%	%	%	%	%
ANZ	6.79	6.74	6.69	6.59	6.59	7.19	7.09
	6.89 +0.25	6.79 +0.15	6.69 +0.05	6.59	6.49 -0.10	6.39 -0.10	6.29 -0.10
	6.54	6.54	6.49	6.45	6.59	6.59	6.59
	6.50	6.49		6.49	6.79	6.79	6.79
	6.89	6.79	6.69	6.59	5.99	5.99	5.99
Bank of China		6.39	6.35	6.29	6.49	6.49	6.49
China Construction Bank	6.60	6.54	6.49	6.45	6.40	6.40	6.40
Co-operative Bank [*FHB special]	6.35	6.25*	6.35	6.35	6.49	6.59	6.59
Heartland Bank		6.14	6.15	5.99	5.95
HSBC	6.44	6.39	6.44	6.49	6.59	6.65	6.69
ICBC	6.45	6.39	6.29	6.29	6.59	6.59	6.59
	6.59	6.59	6.64	6.59	6.59	6.65	6.69
	6.54	6.54	6.49	6.49	6.59	6.59	6.49