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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