ASB has reduced its mortgage rates and has grabbed the market-leading position among all banks with the lowest rate for four years fixed.
It also has the lowest rate for a main bank for three years fixed and shares that position for 18 months, two years and five years.
Their rate reductions involve a mixture of 'specials' and standard residential rates.
ASB has reduced its standard one year home loan rate by -10 bps to 5.99% from 6.09% but has not changed its 'special' one year offer of 5.70%.
HSBC still has the lowest one year rate offer at 5.39%.
ASB have lowered their standard 18 month fixed rate by -21 bps to 6.09% from 6.30%, matching BNZ but still significantly above the very low SBS Bank offer of 5.74%.
They have retained their 'special' 5.75% two year rate although they have reduced their standard tow year rate to 6.19%, a drop of -21 bps.
For three years fixed, both the standard and 'special' offer rates have been cut by ASB. The new 'special' is 5.99% and the new standard is 6.39%, reductions of -20 bps and -26 bps respectively.
It is their new lower four year rate where ASB has a stand-out offer; 5.99% is their new 'special' offer for this term, a substantial -81 bps cut from their old four year standard rate. Their new four year standard rate is 6.39%.
For five years fixed, ASB has a new standard rate of 6.49%, a -50 bps drop from the previous rate.
All these rate changes came into effect at 5pm Friday, November 14, 2014.
They also apply to the BankDirect and Sovereign offers as well, except BankDirect does not offer any of the four year rates.
It is not often that the ASB stable has any market-leading rate positions, so these changes represent something of a departure for a bank that has the second largest mortgage book in New Zealand (after ANZ). For them, this is an aggressive rate move and may signal a renewed energy by ASB to compete harder in a home loan market that is struggling with volume growth.
Wholesale swap rates have remained low, especially for longer terms and these lower cost of funds will help them sharpen their pencils.
ASB has not changed its non-rate cash incentives with any of these latest changes.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how the updated mortgage rates will compare as at 8:00 am Monday, November 17, 2014:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.69% | 6.25% | 5.75% | 6.09% | 6.79% | 6.99% |
 |
5.70% | 6.09% | 5.75% | 5.99% | 5.99% | 6.49% |
 |
5.89% | 6.09% | 5.75% | 6.09% | 6.49% | 6.59% |
 |
5.69% | 5.75% | 6.09% | 6.59% | 5.99% | |
 |
6.09% | 6.30% | 5.75% | 6.19% | 6.79% | 6.49% |
| Co-op Bank | 5.70% | 5.75% | 5.75% | 6.09% | 6.40% | 6.49% |
 |
5.39% | 5.75% | 5.99% | 6.79% | 6.99% | |
| SBS Bank | 5.59% | 5.74% | 5.49% | 5.69% | 6.19% | |
 |
5.70% | 5.90% | 5.70% | 6.20% | 6.65% | 6.85% |
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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »
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4 Comments
It's the impossibility of serving the debt without borrowings
http://www.rbnz.govt.nz/statistics/tables/c20/
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