ASB has unveiled cuts to its carded, or advertised, fixed-term home loan interest rates for terms from six months to four years, taking its one year "special" under 5%.
The biggest cuts are of 50 basis points to the bank's one-year, 18-month and two year standard rates, dropping all three to 5.49%.
ASB also has a one-year "special," which it has dropped 36 basis points to 4.99%, and a two-year "special" that it has cut 29 basis points to 5.10%.
The only bank with lower carded one and two year rates than ASB's specials is HSBC, where they're only available to "premier" customers and both are 4.95%. HSBC's premier customers require either a minimum combined home loan of $500,000 or NZ$100,000 in savings and investments with HSBC.
ASB’s fixed rate specials are available to customers who have at least 20% equity, a loan to valuation ratio of less than or equal to 80%, have their salary or wages credited to a main transaction account with ASB and one other ASB product.
The new rates kick in from 5pm Monday.
ASB's the second bank to have cut some fixed-term mortgage rates since the Reserve Bank dropped the Official Cash Rate by 25 basis points to 3.25% last Thursday. The first to do so was HSBC.
Below is ASB's full rate card featuring the announced changes. And see all banks' carded, or advertised, home loan rates here.
Fixed Term | change | New rate |
% pa | % pa | |
6 months | -0.10 | 5.49 |
1 year standard | -0.50 | 5.49 |
1 year 'special' | -0.36 | 4.99 |
18 month standard | -0.50 | 5.49 |
2 year standard | -0.50 | 5.49 |
2 year 'special' | -0.29 | 5.10 |
3 year standard | -0.24 | 5.75 |
3 year 'special' | no change | 5.39 |
4 year standard | -0.24 | 5.75 |
5 year standard | no change | 5.99 |
5 year 'special | no change | 5.65 |
These rates compare as follows:
below 80% LVR | Floating | 1 yr | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
6.49% | 5.39% | 5.39% | 5.59% | 5.75% | 5.79% | |
6.50% | 4.99% | 5.10% | 5.39% | 5.75% | 5.65% | |
6.34% | 5.35% | 5.39% | 5.49% | 5.65% | 5.75% | |
6.40% | 5.39% | 5.39% | 5.39% | 5.99% | 5.60% | |
6.40% | 5.25% | 5.39% | 5.39% | 5.75% | 5.79% | |
6.45% | 5.15% | 5.25% | 5.35% | 5.55% | 5.69% | |
6.60% | 4.95% | 4.95% | 5.40% | 5.50% | 5.60% | |
SBS Bank | 6.65% | 5.59% | 5.35% | 5.35% | 5.35% | |
6.49% | 5.55% | 5.29% | 5.40% | 6.40% | 5.85% |
6 Comments
Interesting question on fixing 5 yrs.
Some issues: many borrowers were stung badly by the break fees in 2009 so now are wary of long term lock-in. E.g. You sell your house in 2 years due to job promotion/move despite not planned atm.
Secondly: if interest rates are down low for years then there is no need to fix for so long as the risk of a bounce hike is low.
You may wish to increase your principal repayments during the 5 years.
But still, it's tempting.
Oh & also you miss the fun of guessing interest rate movements for 5 yrs!
I don't see why we just can't fix for 20 years like the USA with no break fees. Now that would be a no brainer.
Only if highly likely to hold the property in 5 years and need the certainty of being fixed.
If you are a strong financial position with good income and LVR however with a lot of business with your bank you should be able to secure around 4.8 - 4.7% net of cashbacks currently, looking at a 2-3 year term.
You can wait for 4.5% nett but while you wait you pay over the top with floating..
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