Two more main banks have announced mortgage interest rate changes. (This story has been corrected.)
BNZ has adjusted two key fixed rates down. Neither are especially notable as they are only meeting the levels set by their main rivals.
However they are doing this with standard rates, rather than the 'specials' and their restrictive conditions their rivals are requiring.
Westpac however has also pushed their bar lower with changes across the whole of its fixed rate offers.
Firstly, BNZ cut its standard one year fixed rate to 5.35%, a reduction of -14 bps. This rate matches ASB's recently lowered 'special' rate but is still higher for that term than HSBC and the Cooperative Bank.
BNZ has also cut its standard three year rate to 5.49%, a reduction of -6 bps. Only ANZ has a higher rate for three years; SBS Bank has the lowest rate for this term at 5.35%.
Westpac has reset its standard rates at new lower levels and retained two of its four 'specials', neither of which are market leaders.
Its one year standard rate has fallen to 5.59% which is a -40 bps drop and brings their rate for this term back into line with the market.
They have launched a new one year 'special' of 5.25% which effectively drops their one year rate by -74 bps.
They have removed their 18 month 'special' and reduced their 18 month standard rate to 5.55%. This is an effective rise of +21 bps.
They have retained their two year 'special' at 5.39%.
Their three year 'special' has been removed and that old rate has become the new standard rate of 5.59%.
Their four year rate is a standard one and is now 5.75%, a reduction of -64 bps from a very uncompetitive position.
Westpac's new five year standard rate is 5.79%. This replaces their five year 'special' of 5.65% so it amounts to an effective increase of +14 bps, but without the conditions.
These changes cap an active week of fixed mortgage rate reductions. Essentially the market rates for one year and eighteen months fell by a bit more than -10 bps and the market averages for three years fell by -5 bps. The less popular four year rates fell by -20 bps. The overall net effect of other terms was minor.
Wholesale rates have been declining recently at the shorter 1 - 3 year end. However they have shown some sustained rises in the 5 to 10 year terms recently.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how mortgage rates from the banks compare at 8am Monday, May 25, 2015:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.59% | 5.55% | 5.39% | 5.59% | 5.75% | 5.79% |
 |
5.35% | 5.99% | 5.39% | 5.39% | 5.99% | 5.65% |
 |
5.35% | 5.39% | 5.49% | 5.65% | 5.75% | |
 |
5.39% | 5.39% | 5.39% | 5.99% | 5.60% | |
 |
5.25% | 5.55% | 5.39% | 5.39% | 5.75% | 5.79% |
 |
5.29% | 4.99% | 5.39% | 5.49% | 5.69% | 5.69% |
 |
5.20% | 5.30% | 5.40% | 5.50% | 5.60% | |
| SBS Bank | 5.59% | 5.74% | 5.35% | 5.35% | 5.35% | |
 |
5.70% | 5.80% | 5.29% | 5.40% | 6.40% | 5.85% |
(Correction: This story originally referred to the current Westpac specials as for two and three years. This was wrong. They are for one and two years and the above story has been corrected to reflect the right terms.)
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9 Comments
Ignore these published rates. Most banks will now negotiate down to 4.95% or 4.99% fixed for 2 years. Watch out for mortgage brokers too as the higher the rate they can convince you to take the higher the trail income they enjoy. Best to negotiate directly with your bank.
According to the Westpac website the 5.25% rate is for the One year fixed term.
A one year term is much more attractive as interest rates continue to decline in the face of deflation and imminent OCR cuts.
With unofficial sub 5 rates here now, NZ is moving more in line with Australian borrowers who have enjoyed carded 4.x rates for some time.
But what about the floating. Time for it to be down down down.
Floating has minimal funding cost risk for banks and they can flick on an variations to borrowers very quickly.
I think the banks will be making a killing on floating.
They have managed to take these so far out of attention DC did not even report them above.
Perhaps the reason that NZ floating rates are so expensive is the very low risk of floating rates rising. So borrowers are paying a premium for having the agility & ability to choose an even better fixed rate.
I agree that floating rates are relatively high, so borrowers are being priced towards fixed rates, which achieves the more strategic (for the banks) goal of lock-in.
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