Kiwibank started the month with market leading four and five year fixed home loan rates, and is starting next week with a notable cut to its one year rate as well.
Effective Monday, September 22, their new one year standard mortgage rate will be 5.79%.
That is a -20 bps reduction from 5.99%.
As low as that rate is, it is not as low as the lowest rates from ANZ or HSBC.
However, as it is a standard rate from Kiwibank it is not as restricted as the others.
And it qualifies for their latest home loan incentive, no matter what your deposit. Kiwibank has a cash incentive for all new lending of $100,000 or more. They are offering a $2,500 Freedom Furniture gift card provided your "everyday banking is moved to Kiwibank". This incentive applies irrespective of the 'special' rate availability.
With both the election and the RBNZ review out of the way, and Spring upon us, we expect ramped up home loan competition involving aggressive rate competition and broadening non-cash incentives.
The only inhibition could be rising wholesale interest rates. However it is too soon to declare them on the way. The US Fed is starting to prepare bond markets for rises in 2015 and the RBNZ seems pretty determined to 'revert to normal' as soon as it can - even without the threat of inflation. Recent wholesale market trends do suggest markets are readying for rising rates but so far there is little follow-through.
See all banks' carded, or advertised, home loan rates here.
The current incentive offers are here.
This is how we expect the updated mortgage rates will compare as at 8:00 am Monday, September 22, 2014:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.75% | 6.25% | 5.99% | 6.49% | 7.15% |
 |
6.09% | 6.30% | 5.99% | 6.19% | 6.99% |
 |
5.99% | 6.25% | 5.99% | 6.19% | 6.99% |
| Kiwibank | 5.79% | 5.89% | 6.19% | 6.79% | |
 |
6.09% | 6.30% | 5.99% | 6.19% | 6.99% |
| Co-op Bank | 5.95% | 5.89% | 5.99% | 6.19% | 6.89% |
 |
5.75% | 5.75% | 5.75% | 6.99% | |
 |
5.85% | 5.99% | 5.99% | 5.89% | 6.79% |
 |
5.95% | 6.05% | 5.79% | 6.30% | 7.00% |
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1 Comments
The Global trend for interest rates is downwards and down for a long time.
The RBNZ is struggling to maintain slight upwards movements, and although 3.5% is historically high for NZ it is still very high compared to the USA, UK, Europe, Japan, Australia etc.
the banks will simply circumvent the futile orthodox efforts of the RBNZ and offer lower and lower fixed rates for borrowers, who are resisting loans at 6% plus.
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