Both Westpac and the Co-operative Bank have made rate reductions to their home loan offers overnight.
Westpac has added two new 'special' rates.
Their two year fixed 'special' has become 5.85%, a rate that brings it back down to the level of most of its main rivals.
Their five year fixed rate 'special' has become 6.89% which is at a level below its main rivals. Only SBS Bank has a lower five year rate.
The bank had a 6.59% four year 'special', but has ended that offer today.
Westpac 'specials' come with a range of conditions, including the now-standard one of requiring the take-up of other Westpac products.
In addition, they have reduced their standard 3 year rate by 16 bps to 6.69% and their standard four year rate to 6.79% which is a 40 bps reduction.
Westpac also offers a capped rate contract and it has decreased this cap by 20 bps to 6.49%.
At the same time, the Co-operative Bank reduced its two three year rate to 5.85 from 5.99%, a 14 bps reduction, a level that seems to be becoming the norm for that term.
We saw further reductions in wholesale swap rates yesterday, pushed lower by a worldwide bond market surge. These wholesale money reductions flow through to the local market quite quickly and may give room for even more reductions in the coming week.
See all banks' carded, or advertised, home loan rates here.
This is how the new Westpac and Co-op Bank rates compares:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.95% | 6.19% | 5.85% | 6.55% | 7.40% |
 |
5.85% | 5.99% | 5.89% | 6.25% | 7.40% |
 |
5.85% | 5.99% | 5.89% | 6.25% | 6.99% |
| Kiwibank | 5.85% | 5.85%* | 6.29% | 7.20% | |
 |
5.95% | 6.14% | 5.85% | 6.25% | 6.89% |
| Co-op Bank | 5.85% | 5.85% | 5.85% | 6.25% | 6.99% |
 |
5.59% | 5.99% | 5.99% | 6.99% | |
 |
5.70% | 5.85% | 5.99% | 5.95% | 6.79% |
| TSB | 5.70% | 5.85% | 5.80% | 6.25% | 7.40% |
* only as part of their 60/40 'special' deal. Otherwise 6.19%.
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3 Comments
So the old argument of this time being different due to high proportion of borrowers floating is about to go out the window with these competitive longer term rates. Means insulation from OCR over next 3+ year at least. Equals prolonged house price inflation spreading out of auckland and chch.
shows also that past 5 years or so banks have had a good margin, prehaps having all the lending they needed or wanted at that time given the risks.
If they want to maintain or increase lending volume they now have room to move the margin down and get more competitive on price.
Who would have thought, bankers know a thing or 2 about making money...
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