Mortgage rate cuts, deposit rate increases

ANZ, National introduce market leading low advertised 2-year mortgage rate; BNZ introduces special 1-year term deposit rate

17th Sep 12, 10:03am by Gareth Vaughan

(Updated to record the BNZ rate reduction for its 150 day TD special.) Sister banks ANZ and National have cut their one and two-year advertised, or carded, home loan rates with the new two-year rate the lowest one currently advertised by a bank.

ANZ and National, who combined form ANZ New Zealand whose residential mortgage book grew by more than all its rivals combined in the June quarter, have cut their two-year rate by 21 basis points to 5.39%, just below the previously lowest advertised rate of 5.40% from BNZ and SBS Bank.

Their new 5.45% one-year rate, which was cut 5 basis points, is 20 basis points above the lowest advertised rate of 5.25% from BNZ, Kiwibank and SBS Bank.

See all bank advertised mortgage rates here

Meanwhile, BNZ has introduced a new one-year special term deposit rate of 4.50%. The rate's open for minimum deposits of at least NZ$5,000 and interest will be paid at maturity. On Tuesday however, it reduced its 150 day TD special by 10 bps to 4.10% from 4.20%, interest at maturity.

The only banks matching that one-year advertised rates are Bank or Baroda and Bank of India (both for minimum deposits of NZ$5,000), Kookmin (for minimum deposits of NZ$100,000) and RaboDirect. The two Indian banks pay interest quarterly and RaboDirect, which requires a minimum deposit of just NZ$1,000, annually.

And ANZ and National have increased a range of term deposit rates with their nine-month rate up 25 basis points to 4.25%, their one-year rate up 30 basis points to 4.30%, their 18-month rate up 20 basis points to 4.30%, and their two-year rate up five basis points to 4.30%.

See all advertised bank term deposit rates for periods of one to five years here and for one to nine months here.

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56 Comments

by SK | 17th Sep 12, 10:16am 1347833770

Spring is here - mortgage rate wars here we go.

Should give the Auckland property market a much needed boost.

by 28_29 yr old | 17th Sep 12, 11:14am 1347837277

Come on kiwibank and ASB, get in there and fight......

Still waiting for a floating cut......

by SK | 17th Sep 12, 11:46am 1347839176

What % are you on?

by 28_29 yr old | 17th Sep 12, 4:59pm 1347857987

floating 5% and a mxture of fixed between 5.2-5.35% for 2 and 3 years

by steven | 17th Sep 12, 11:17am 1347837441

Given you have recorded decent paper gains, do you really think it will just continue to boost? It has to go pop at some stage, this time is no different.

regards

by Blue Meany | 17th Sep 12, 1:43pm 1347846218

It hasn't popped in the past, why would it pop in the future?

by steven | 17th Sep 12, 3:29pm 1347852557

oh sorry, didnt realise you didnt know there was the rest of the world outside of NZ and its not doing too well.

Just keep saying this time its different.....Im sure you will be OK.

regards

by SK | 17th Sep 12, 4:00pm 1347854417

Meanwhile house price inflation is running at 10%+ and counter cyclic investors are making shed loads.

by steven | 17th Sep 12, 4:41pm 1347856896

In selected areas.....but remember nero he fiddled while Rme burnt....the effects are not here yet.

regards

by SK | 17th Sep 12, 4:48pm 1347857324

Let us know when to hit the dump button wont you.

by StanGoodvibes | 17th Sep 12, 4:04pm 1347854685

It hasn't popped in the past, why would it pop in the future?

BlueMeany I can only assume from that statement you are a goldfish. It has popped several times in the past, and this is the greatest asset bubble since the bubble was first invented.

As The Oracle would say "everthing that has a beginning, has an end"

Like the mining boom bubble suddenly going 'pop' in Australia, you can see the speculators going down with it - Tinkler and Forrest are the latest in a long line of people going under who gambled on the boomtimes going forever. How many people did you hear say 'invest in property, it never goes down' back in early 2007? How many of them lost their shirt in America and Europe?

Some people get lucky - I know of quite a few people who just happened to cash up before the 1987 sharemarket crash, and a few others who cashed out before various asset price crashes since, but there are a load of people who get caught short and end up bankrupt or trapped in negative equity because they don't understand the nature of change and black swan events.

Like sands through the hourglass (these are the Days of our Lives) things trickle along until we think it can never be any different, then one day someone comes and tips the economic egg-timer upside down. Australia and NZ have so far escaped The Big Correction in house prices, but it's coming as sure as eggs.

by powerdownkiwi | 17th Sep 12, 4:31pm 1347856316

sgv - perfectly put.

Wanna buy some South Pine? I'll swap you 2 for 1, Amalgamated Broom......

How about a 100 year-old house in Ponsonby?

by Blue Meany | 17th Sep 12, 5:42pm 1347860541

Those good vibes are a little grumpy there Stan....I always know I've won an argument when punters start quoting the 'Matrix' and soap operas, who next? Mufasa?

Let me qualify, before you start screaming at me about house prices declining in Ranfurly, Timaru and Waihi. I am talking Auckland, the big smoke, the population capital of NZ, the place where all (ok not all, but most) immigrants arrive and stay... the place where hot hot Chinese (read other other countries here, you are a smart man, you know the ones) money keeps coming and coming and coming!! As long as we have a free health and pension system in NZ (China, India and South Africa don't - amongst many others of course) we remain a soft touch and a great place to retire too... Chuck in a massive housing shortage, and a city council whose answer to all Auckland's woes, is to bring in more immigrants and you have house prices going up and up and up...

Then you have John Key, who feels the only way he can leave a mark on history (he is after all a most unremarkable fellow) is to pay down debt and 'reach surplus.' I see creeping creeping inflation on NZs cards... salaries stay the same but everything else goes up, including houses... for Kiwis that's not a good thing, but for the never ending stream of cashed up immigrants, you have, well a house price trapeze act that just keeps swiniging higher.

Being sane and rational has NO place in the Auckland property market, comparing it to any other city in the world, is in itself, an act of insanity...

The only correction on NZ house prices (read Auckland - nowhere else matters of course - just kidding...), is, I'm afraid to say for you, me and most other folk, going to be a correction upwards. Sk and the property bulls are correct...alas...deep sigh!

I hope you read my comment with the humour intended...

youre aye, Blue Meany

by StanGoodvibes | 17th Sep 12, 6:07pm 1347862044

Haha well like everyone in (greater) Auckland I have a vested interest in prices rocketting up in Auckland and surrounds (pssssst anyone wanna buy a fantastic lifestyle property with farm/bush/sea views and private beach access just north of Pakiri :-) and I totally hear you about the cashed-up immigration and lack of housing growth fueling Aucklands property market, and tend to agree - like London to the rest of the UK, Auckland is it's own island when it comes to house prices.

It's still an asset bubble though, and even though it never seems likely, eventually they all pop one way or another. I think Honkers is actually the one currently popping.

Of course it's in Aucklands nature to be fixated about property prices. It has ever been thus, or at least since I got there in late 80's. But apart from academic debate on here to pass the working day I don't really find it that interesting.

I'll let you have the comment about Days Of Our Lives, because I only threw it in there for the novelty factor and so I could use the egg-timer analogy, however there is nothing argument-losing about quoting The Matrix.

by Gibber | 17th Sep 12, 7:23pm 1347866587

Haha well like everyone in (greater) Auckland I have a vested interest in prices rocketting up in Auckland

Didn't quite grok that until I rewrote it in my head to be more like the following:

Haha well like everyone in (greater) Auckland that is already in the property market, or benefits from increased prices and turnover (such as real estate agents), I have a vested interest in prices rocketting up in Auckland

Can't see the poor and those who are unable to get on the property ladder thinking they have a vested interest in seeing prices rocketting up. In all liklihood they view the prices increasing with a sense of dread, coz, once those prices are up, there will be landlords coming along saying, "got to get a realistic return on my property. And seeing as its x in price, I am going to charge y" But there you go. Depends on the lens through which you view life.

by StanGoodvibes | 18th Sep 12, 11:57am 1347926225

You are spot on Gibber. My vested interest in a purely selfish one, because after all, it really is All About Me :-)

However the other side of the coin to this argument is NZ's fixation on owning a property. Yes I currently own my own little slice of paradise up north of Auckland, but here in Sydney I am more than happy to rent and would never consider buying here even if I stay here until I forget to keep breathing one day.

I have toyed with flogging my place and not owning anywhere. There are several sound financial reasons for not owning a property and just renting - most of the worlds population do that in fact and studies show they are generally happier than we are. Go figure. So if prices go up a bit more and/or someone gives me a good price, I'll probably take it and set myself free.

So the issue for the poor should be one of plentiful rental properties at a reasonable rental rate. But if you really must buy - wait for whenever prices get back to the trend of 3:1 with income. It'll happen eventually.

by Blue Meany | 18th Sep 12, 10:28am 1347920910

Indeed SGV... I think I'll take the blue pill though... Ignorance is truly bliss... ;)

by steven | 17th Sep 12, 4:43pm 1347857018

NB US house prices down 30~40%....Ireland no idea how much down, China?....Spain? and that hasnt started really.

Yes sure, this time its different.

regards

by SK | 17th Sep 12, 4:51pm 1347857472

Dont be silly - at least try and compare apples with apples.

by StanGoodvibes | 17th Sep 12, 5:11pm 1347858682

Um.... SK, which part of comparing house prices in Europe/UK/China/US is not the same as comparing house prices in NZ/Australia?

*confused*

by economist | 17th Sep 12, 5:38pm 1347860322

... the parts where many houses just sit empty and no one will buy them (Ireland, Spain, China, Detroit, etc...)....- that's not apples for apples... [HK property up 90% since 2006?]....

Where are the suburbs of streets and streets (even entire suburbs) of empty houses in Auckland? When that happens you'll be comparing apples with apples.

Rgds.

by StanGoodvibes | 17th Sep 12, 5:44pm 1347860680

ah true. I still think that NZ and Australia will get back to the longstanding ratio of 3:1 for house prices vs Income.

Whether that happens by a crash or by long term sideways movement of prices as inflation bumps wages is another question.

by economist | 17th Sep 12, 7:43pm 1347867797

... forgot to add also in those places where property has crashed so badly overseas I'll think you find real unemployment up over 20%..., so I guess comparing apples with apples if Auckland unemployment went over 20% I can see a property crash, but dont think that likely... places like Queenstown though - far more likely as they are just a leverage on the tourist dollar which could dry up tomorrow... if unemployment in AKL went over 20% (or anything near it) the RBNZ would drop interest rates though the floor - making even current property prices net cash positive for investors...

by MortgageBelt | 17th Sep 12, 7:53pm 1347868434

Bring on the 25% unemployment in Auckland.

Too much Career Stress up there anyway.

Then the real heartland in the mortgagebelt can enjoy super low interest rates.

Sorry Auckland ....

by economist | 17th Sep 12, 8:46pm 1347871572

... and of those 25% unemployed,

1/3 will be renters anyway and will get assistance from the taxpayers that are left (accomodation supplement indeed)
that leaves 16.75% - half of those probably have high equity (enough to make the mortgage cost way below rental costs) and can survive on one income
that leaves 8.4 % - half of these have no mortgage at all, so they will be fine on the benefit
that leaves 4.2% - half of these will move to the good old heartland (or that Big West Desert Island - exit stage left) which makes the traffic congession much easier to tolerate for the rest of AKL. Ah....
that leaves 2.1%, half of which always have been unemployed start with, have never had a job, and just dont want one so they can just stay where they are.... which is where they have always been...
that leaves 1.55% - half of which will return home and live with mum and dad
that leaves 0.78% - half of which get jobs at the local council for over 100,000 per year
that leaves 0.39% that will be a mortagee sales - depressing the overall AKL property market by... uh... anything up to 1.2% for as long as 3 months...

hehehehehe

by scarfie | 17th Sep 12, 10:15pm 1347876924

Yes that is funny. Mind you there is probably more than 25% unemployed already. If you reversed it and looked at how many are actually employed, they break that down into who are actually participating in productive work(ie: they make something), then cut that by a quarter (the reverse of going from current unemployed to 25%) ............ :-P

by kiwimm | 18th Sep 12, 9:59am 1347919190

Markets which lost the largest % of housing value in the US - New York, Los Angeles, San Francisco. All centres with limited supply, large immigration and plentiful jobs.

How do they compare to Auckland?

by Blue Meany | 18th Sep 12, 10:31am 1347921100

Kiwimm, as I said in my earlier comment,... 'Being sane and rational has NO place in the Auckland property market, comparing it to any other city in the world, is in itself, an act of insanity...'

by vavau.to | 17th Sep 12, 10:32am 1347834775

yep everyone paying back the money by leaving repayment at there old level, when the RB cuts rates again as fankly it has no choice, or wiping out tourism,fishing , farming,forestry manufactuering (almost gone), it will add to this goemetric progression further. at least the banks wont need to import funds. there are no new house been built for four years, supply and demand.

by KH | 17th Sep 12, 10:45am 1347835549

But reductions only on fixed term. Banks need to stop the pretense and cut their floating rates.

While we are at that, take any and every opportunity of reduced interest rates to reduce debt. It's the only safety you have in uncertain times.

by MortgageBelt | 17th Sep 12, 11:33am 1347838437

Floating cuts?

by hauraki | 17th Sep 12, 12:19pm 1347841149

Doubt any floating cuts soon - the advertised rate has been discounted for many customers who bothered to ask, and most importantly, it doesn't lock customers in.

I've been on 5.1% float since May. Some others got ~5% plus switching costs.

More fixed rate (< 2 yrs) cuts/specials may be on the board. Banks want to lock customers in for that long, in anticipation that OCR won't bulge much before then.

by eagleeye | 17th Sep 12, 12:37pm 1347842274

I HAVE A CURRENT MORTGAGE OF 310000 AFTER 1^ST OF OCT WITH NATONAL BANK WHICH IS COMING DUE IN 2 WEEKS FOR RENEWAL THEY SAID WONT REDUCE THE FLOATING MORE THAN .25 GOT FEW QUOTES FROM WESTPAC AND ASB WHO OFFERED ME AROUND 5.24 FLOATING WITH 2500$ SWEETNER DON’T KNOW WHETHER IT’S A GOOD DEAL OR NOT SHOULD I BE LOOKING FOR A MORTGAGE BROKER TO GET ME SOMETHING BETTER .GOT GOOD CREDIT EVERTHING .BANKS JUST WANT TO MAKE MORE MONEY .......

by Blue Meany | 17th Sep 12, 1:46pm 1347846412

Contact New Zealand Homeloans, they'll put you right! Am very impressed with their total package!

by shorts | 17th Sep 12, 3:08pm 1347851295

We just fixed for some for one year at 4.99% and some for 5.75% for 4 years and have a floating rate of 5.10%. $2.5K is pretty good though.

by acapulong | 17th Sep 12, 5:58pm 1347861501

4.99% for a year is Excellent rate!!! + the $2.5K 'Sweeteners'... which bank please. i think it is time to SHOP NOW

by boofta | 18th Sep 12, 11:28am 1347924492

Unfortunately the sad realty is that everyone is after your money, so keep your hands in your pocket, do some research, and do a mass email out to all lending instituions with all the relevant details of your mortgage, credit history and work situation. I am sure that with a mortgage as large as yours, they will all be clambering over one another to get your business.

by StanGoodvibes | 17th Sep 12, 3:30pm 1347852615

I fixed at a year for 4.99%. Bank Manager suggested that it might be safer to fix at slightly higher for 3-4 years but the way the world (and particularly for NZ - Australias) economy is going at present I suspect that the OCR in NZ might head down even further in 2013.

I'm taking a punt on my bearish attitude to the Global Recession being right. Time will tell...

by SK | 17th Sep 12, 4:02pm 1347854567

Should be able to get that rate floating.

by StanGoodvibes | 17th Sep 12, 5:48pm 1347860900

It was a couple of months ago - I was floating at 5.5%, which was the lowest it was going at the time.

by acapulong | 17th Sep 12, 5:53pm 1347861235

Love your work.. can I please ask which bank gave you the rate... i will try my luck as well

by StanGoodvibes | 17th Sep 12, 6:12pm 1347862374

It's the National Bank. Kiwibank were offering the same but I've banked with National for like 20 years, so they gave me an extra 26 base points off because I asked (the best they offered at the time was 5.25%).

I'm not sure what the rates on offer currently are or what you can get by asking your bank for more, but the old maxim always applies - you don't ask, you don't get.

Good luck.

by MortgageBelt | 17th Sep 12, 7:43pm 1347867785

My own recommended Mortgage Rate guidelines for all banks operating in NZ:

Floating            4.5%

6 month Fixed 3.9%

1 Year Fixed    4.2%

2 Year     4.5%

3 Year     4.9%

5 Year    5.25%

Would still be dearer than UK, USA, Singapore, Taiwan, Germany etc etc

by Father Ted | 17th Sep 12, 9:47pm 1347875234

So what happens to savings and term deposit rates?

by MortgageBelt | 17th Sep 12, 10:10pm 1347876619

Ted - Just be thankful that you actually get back the original sum of money put in. Any thing extra (like interest) will be a bonus.

You might actually get charged for entrusting the bank to look after your money - so be thankful atm that you don't get negative interest.

by notaneconomist | 18th Sep 12, 7:42pm 1347954178

Father Ted - the banks simply aren't interested in depositors. Need to create a weekly bank run where everyone withdraws their deposits and lets see what happens.

by Money Man | 18th Sep 12, 9:26am 1347917203

Is this a wishlist or based on some logic?

How do you justify 6 month rate 0.7% below floating?

by boofta | 18th Sep 12, 11:37am 1347925071

MortgageBelt : C'mon cuzz - youre dellusional. Hopefully the tooth fairy will slip a fifty under my pillow tonight when I pull my tooth. Im down to one now, times are getting tuff. One positive thing has come out iof it though - I do have a beautiful smile.

by Grant A | 18th Sep 12, 5:12pm 1347945130

Mortgage Belt - you expect a 4.50% floating rate in the current conditions where banks are prepared tp pay up close to that for 90 day deposits ? No, what you're demanding is banks to cut deposit rates further to bail out borrowers and further stress the likes of pensioners and other fixed interest investors with few options.

by MortgageBelt | 18th Sep 12, 5:51pm 1347947513

5.74 Floating in todays' conditions is higher relatively than 8% floating in 2006/7 conditions. Borrowers think that rates are currently low. They are not - they are sky high relative to general global economic conditions.

Floating should mean floating - not concreted in. While they play around with confusing the public by dropping then upping fixed rates. "Confuse the punters deliberately" in the words of Theresa Gattung, speaking of Telecoms deliberate "Confusion of mobile/BB/Data rates".

Raising Interest Rates is now impossible.

Sorry savers.

by moa man | 18th Sep 12, 7:10pm 1347952249

As a saver, and bank shareholder, I encourage you to continue your mortgage lifestyle, you will stay on the hamster wheel for longer and thus continue to pay me more dividends. Such a shame, because if people lived within thier means, they would be price makers, instead of price takers.

by Father Ted | 19th Sep 12, 8:19pm 1348042789

For floating rates to be truly floating, wouldn't that require banks to move floating rates outside of MS and OCR reviews? Didn't the banks in Australia do this just recently to much hype and critcism in the media.

I guess mortgage holders would be happy with this when rates are falling but would have fifty fits when rates rise. Would you accept a floating rate increase if the OCR didn't move?

by MortgageBelt | 19th Sep 12, 8:58pm 1348045105

I don't think we need to worry about rising interest rates anymore.

Rates will never be able to rise again. Ever.

Maybe when we get a Global Reset.

Last 3.5 years: "Rates soon to rise again." "Rising in 2010" (Nope). "Rapidly rising in 2011" (nope). "Definitely rising in 2012 and really really quick - you better fix" (never happened). "Next time rises in 2013 - maybe" "Rises delayed until 2014 now".

How about: "Forget it - rises are never going to happen - - stop worrying"

So why fix when it's all going downhill?

by SK | 19th Sep 12, 9:24pm 1348046661

2 bedroom unit for $669,000 anyone?

http://www.sellrealty.co.nz/listing/Point%20Chevalier/PPC10481

by boofta | 18th Sep 12, 11:00am 1347922806

How predicatable - Why isnt there a lending institution out there being alot more agressive in slashing 2 year rates, particularly in light of what is happening globally. It smacks of collusion - what do you think?

by SK | 18th Sep 12, 4:47pm 1347943662

The housing boom rolls on, especially in Auckland where Westmere has joined the $1m plus category. In the 3 month period of June, July, August there were 18 sales in Westmere with 11 of them above $1,000,000.

In that same period in Pt Chevalier there were 16 sales above $1,000,000 and in Grey Lynn there were also 16 sales above $1,000,000.