Even as wholesale rates are moving up, two banks have this week lowered some selected mortgage rates.
Earlier this week, Westpac added a 'special' one year fixed rate of 5.39% for borrowers with at least 20% equity. This is 10 bps lower than their standard rate for sub 80% LVR loans.
And today, BNZ has changed its three year fixed rate mortgage offers, also lowering their rate.
BNZ has removed its Classic three year rate of 6.39% and embedded it as their Standard & FlyBuys three year rate.
That means their Standard three year rate has been reduced 26 bps from 6.65%.
They have also made an equivalent change to their low equity three year rate. This has become 6.89%, down 26 bps from 7.15%.
Wholesale money rates rose aggressively in late December, and then began falling away. However, since the surprise CPI data on Tuesday showing inflation higher than markets were expecting, wholesale rates have started rising again.
See all carded, or advertised, bank home loan rates here.
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.49% | 5.85% | 6.29% | 6.65% | 7.20% |
 |
5.49% | 5.85% | 6.29% | 6.60% | 7.20% |
| BNZ | 5.39% | 5.85% | 6.29% | 6.39% | 7.20% |
| Kiwibank | 5.45% | 5.95% | 6.40% | 6.90% | |
 |
5.39% | 5.85% | 6.29% | 6.65% | 7.20% |
| Co-op Bank | 5.29% | 5.85% | 6.25% | ||
 |
5.39% | 6.29% | 6.55% | 7.20% | |
| SBS / HBS | 5.35% | 5.60% | 5.80% | 6.10% | 6.70% |
| TSB | 5.30% | 5.65% | 5.95% | 6.40% | 7.20% |
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8 Comments
What is most notable to me Mortgagebelt is the relaxed criteria banks now have toward lending for property.
I spoke with two seperate banks in the last two days and they are both very keen to lend funds.
NB I am not hindered by the LVR restriction nonsense so my situation is perhaps different to many others. Still... their generosity was remarkable.
There is a simple reality out there, despite all the OCR /inflation/QE chatter.
There simply is a lot of money out there looking for a home. If banks want your business they need to treat you well. The boot is on the borrowers foot.
Despite banks desperate fight to maintain margins, and need maintain the illusion of scarcity, anybody going near a bank wanting funds should expect to be treated like a customer.
Funds ain't scarce.
"Funds" are also not real....
Lots of extra 'monopoly money' sloshing around the Money Markets and Sharemarkets.
It will be interesting to see what happens when various Treasuries start withdrawing that cash from the economy.
Still, it is my opinion that currently it is better to have debts then deposits with a bank. Deposits they can give a hair cut, but they can't foreclose everybody all at once. Banks are not in the business of owning real estate. Ultimately, they need their loans repaid, and will usually look for a softer repayment schedule instead of forcing a mortgagee sale, especially if cash has dried up.
Interesting times ahead, indeed.
If the proverbial really hits the fan you'll still have distressed sellers dragging houseprices down. Whats worse, an OBR haircut on your deposits, or a devaluation of your highly leveraged investment property? Perhaps its better to have very in the way of fiat money or debt.
I had a chat to a loan manager form smaller bank here in Aust (they owned by a giant Australian insurance company). They are willing to lend me 80% on a second property without having security on my own home and they are looking to expand to NZ.. so there is plenty of money around.
Yes Chairman, there's plenty of money around, the question is what's it going to cost. If NZ borrowers credit quality remain fine then the banks will continue to compete with their margins, but that margin is a small component of the total rate. If their cost of funds starts jumping in 25bps lumps each 12 weeks, rates are going higher !
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