Kiwibank is first out of the blocks in 2015 with mortgage rate reduction.
Today it has announced that its 2 year fixed rate offer will be cut to 5.55%, a 20 basis points reduction from 5.75%.
While this rate is better than those offered for this term by the main banks, it is not as sharp as the current special offer by SBS Bank at 5.49%.
Mid-January is the traditional time when the home loan market becomes very active and competition increases between banks.
Competitive responses to the Kiwibank move will likely come quickly.
In addition to its rate move down, Kiwibank is offering a cash incentive of $2,015 for all new home loan lending over $100,000. This is only a minor change in amount from its previous offer of $2,000.
To qualify your borrowing must be with at least 20% equity.
This cash incentive offer applies to all clients including those who borrow through the Government's Welcome Home Loan scheme.
All changes announced today are effective from Monday, January 12, 2015.
The wholesale cost of funds for a 2 year swap has actually changed very little between mid December and today.
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, January 12, 2015:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.59% | 5.70% | 5.75% | 5.99% | 6.49% | 6.59% |
 |
5.59% | 5.70% | 5.75% | 5.85% | 5.99% | 6.49% |
 |
5.69% | 6.09% | 5.75% | 5.99% | 6.49% | 6.59% |
 |
5.69% | 5.55% | 5.89% | 6.39% | 6.49% | |
 |
6.09% | 5.75% | 6.39% | 5.99% | 6.79% | 6.49% |
| Co-op Bank | 5.69% | 5.75% | 5.75% | 5.99% | 6.40% | 6.49% |
 |
5.45% | 5.65% | 5.99% | 6.49% | 6.79% | |
| SBS Bank | 5.59% | 5.74% | 5.49% | 5.69% | 6.19% | |
 |
5.70% | 5.90% | 5.70% | 5.95% | 6.40% | 6.50% |
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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. An AMP mortgage broker can be contacted by following this link »
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12 Comments
Carlos - Floating rates have remained fairly consistent levels with the four hikes in the OCR, but certainly the fixed rates that have moved back down. Several reasons for that, primarily because swap rates (the base to fixed rates) have move down substantially since July-14 (lower dairy prices, lower uS bond rates etc) on the basis that the OCR will remain at 3.5% into at least early 2016, also the spreads on top of swap rates have seen bank funding costs declining from the heady day's of 2008-10 when they had to pay through the nose for any funding, and lastly, plain old competition that everyone should enjoy. If US rates rise, or OCR hikes are suspected to come earlier, then that will see a rise in fixed rate mortgages, but for the moment the current situation is the market's best guess,
Yes the banks have been working on massive margins and making multi billion profits. The OCR has no impact as swap rates are what fixed mortgages are based on and these are collapsing under the weight of negative economic sentiment around the globe. Banks have also just lowered the amount they pay for term deposits and we should soon see fixed mortgage rates at around 4.99% for 2 years - all those who fixed 6 to 9 months ago based on economists and banks dodgy predictions will no be regretting fixing well above 6% Suckers!
Hi, we are signing up for our first mortgage with kiwi bank tomorrow. We are using the welcome home loan scheme and got our loan approved in November last year.I wondered if any one could tell me if I should be trying to get the $2015 out of them even though the t and c's say it says lending must be approved from the 12 th Jan 2015 onwards. We won't draw down on the loan till the 30 th of this month. With a shot or don't bother? As the name suggests I'm new to all this stuff.
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