BNZ has published a new set of mortgage rates on its website overnight, including cuts to most of its fixed mortgage rates, but not its floating mortgage rate.
BNZ's cuts to its regular mortgage rates were slightly smaller than cuts on Tuesday and Wednesday by ANZ NZ, Westpac, ASB and TSB, which also left their floating rates unchanged.
Kiwibank, meanwhile, has also announced cuts to its six month to five year fixed-term mortgage rates effective immediately. Kiwibank cut its six month "limited time special" rate by 36 basis points to 5.59%, one year by 50 basis points to 5.95%, two year by 19 basis points to 6.4%, three year by 19 basis points to 6.9%, four year by 15 basis points to 7.3% and five year rate by 10 basis points to 7.6%. See all bank mortgage rates here.
See our previous article on ANZ, Westpac and ASB's announcement on Tuesday.
See our previous article on TSB's rate cuts on Wednesday.
Unlike the other banks, however, BNZ's regular fixed rates remain above its floating rates. BNZ did, however, introduce a new 'Classic' one year rate at 5.95%, in line with the other banks' regular rates.
Most new borrowers have been choosing floating rather than fixed in recent months because it has been cheaper than most fixed rates.
This leaves open the possibility that BNZ is leaving more of its powder dry for the announcement expected next week from the Reserve Bank of New Zealand, including the possiblity of a cut in the Official Cash Rate in response to the earthquake in Christchurch on February 22.
BNZ cut its regular 1 year rate by 10 bps to 6.35%. It cut its 2 year rate by 15 bps to 6.45%, its three year rate to 6.99% from 7.15%, its four year rate by 5 bps to 7.45% and its five year rate by 5 bps to 7.75%. It left its 6 month rate unchanged at 6.3% and its 7 year rate unchanged at 8.3%.
The other major banks are grouped around 5.95% for 1 year and 6.4% for two years.
However, BNZ did cut its 18 month 'Classic' mortgage rate by 35 bps to 6.20%, which is where it may be targeting its 'fighting' or most competitive rate. ANZ has an 18 month deal of 6.29%, ASB is at 6.20%, TSB is at 6.15% and Westpac is at 6.29%.
Meanwhile, Kiwibank, which has previously been either a market leader or close to it, has yet to announce any rate changes. Its 6 month rate is at 6.95%, its 1 year is at 6.45% and its 2 year rate is at 6.59%.
(Updated with Kiwibank's cuts and BNZ introducing a new 'Classic' one year rate at 5.95%, in line with the other banks' regular rates.)
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11 Comments
While the swap rate keeps falling as it has done recently I don't think Bollard needs to do anything to the OCR.
the 1 yr swap was at 2.88 yesterday down from 3.06.
this is why the banks are pretending to be kind..won't last long...just branding exercises.
you want to see how vicious and competitive they're fighting each other for NEW mortages in OZ !!
FYI...from a very credible source today
"The RBNZ will consider interest rates next Thursday 10 March. At least 25bp rate cut is expected. If the economy was working normally the trend higher in global inflation, the rise in oil prices and the effect of the earthquake would be inflationary. However given the large (and ongoing) shock to GDP from the Canterbury slowdown this is expected to be looked through. The fiscal reorganisation away from taxes to fund (arguably too generous) welfare now seems less controversial. The May budget becomes even more critical if the government uses the opportunity to strengthen NZ’s long term balance sheet.
We met with senior officials in Wellington last week and can report this imperative is well understood. The earthquake response is in 2 parts. Initially the rescue, recovery and re-prioritisation and confidence rebuild must lead. The longer term the opportunities from reducing waste, delivering capital efficiency and allowing the rebalancing between consumption and exporting will emerge (comment welcome).
The NZDAUD remains near 20 year lows of 0.7325.
Interesting how the 'Floating' mortgage rates are very 'sticky' and are not actually 'Floating' downwards. Maybe the floating rates are really Capped - capped underneath and only go UP never down.
People have paid $10,000 + to break their fixed rates to get lower floating rates - now they are being tempted to get back on the fixed train again.
This is an example of the sort of stuff the sheeple never ever read, which explains why they are sheeple!
"Bob, Frank and Freddie all bought identical houses in the same neighborhood in 2004. Each man paid $300,000 for his home.
Bob paid the whole $300,000 in cash. Frank put down 10% (or $30,000) and took out a $270,000 mortgage. Freddie paid $0-down on a 100% mortgage.
"In 2005, home prices rose by 10% which means that Bob made 10% (or $30,000) on his original investment. Frank made 100% on the $30,000 he put down. Freddie made the biggest windfall of all--he made $30,000 in "pure profit".
Question: Which one these three men is most likely to be the banker?
If you guessed "Freddie", you're right. Banks don't like committing capital because it limits profitability. This is why the big banks have fought so ferociously for deregulation, so they're not constrained in the amount of money they can make (via credit creation) with little capital. Of course, when the banking system is propped atop tiny specks of capital, it becomes more wobbly and crisis prone. And, if asset prices suddenly nosedive--as they did when the subprimes exploded--the whole shebang can come crashing down"
http://www.marketoracle.co.uk/Article26651.html
.....oh and that's why Bollard is doing what the bankers tell him to do...let them flog covered bonds to raise cheaper loot to create heaps of new credit to pork the bubbles and keep their bubble market valuations intact.....one stonking big pile of shite!...cutting the ocr is just one tiny extra way bollard is helping the banks to catch the suckers who will feed the bubbles....
Moreso covered bonds means Banks can raise funds at a lower rate which means thay can get higher profitabile for the same amount of credit. You don't need to create more credit to increase profitability, just reprice it with a higher margin.
If the RBNZ is in the pocket of the Banks then why is there a cap on the amount of covered bonds or strong capital requirements for Banks.
These capilal requirement haven't just appears overnight. I recall completing Risk Wieghting reporting for a Bank back in the early 1990, about the time property prices last went backwards.
Sorry no new news here.
PS There are plenty of "Freddie's"out there as well who would not want to use their capital as well as outlined in your three scenerios. More "Freddie's"asking banks for 100% finance than the Banks would even consider approving.
The biggest difference between the sub prime stuff in USA was that it was bundled up and sold as an investment whereas in NZ it stayed on the Lenders balance sheet hence they had to deal with it, like the mug who had purchased a bond portfolio including this sub prime stuff .
Money man, well defined comments based on sound analysis. Wolly, I do love your little conspiracy theories, they do make me giggle. It is funny how you are quite happy to bash the Aussie banks but your analysis rarely include Kiwibank or TSB and how they are looking at alternative sources of funding, or they added experiance margin expansion. If you are going to report the banking industry it would be great if you analysis including all banks and put the whole industry in perspective.
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