Westpac has joined in the rate-cutting party.
Today they cut their two year fixed home loan 'special' by -40 bps to 4.99%.
That matches yesterday's move by Kiwibank.
And earlier in the week, ASB moved its 1 year fixed rate to 4.99%.
The normally very rate-competitive smaller banks have not gone there yet, although HSBC's Premier rates already had some sub-5% offers.
At the same time Westpac has set all its standard rates for terms up to two years at 5.49%.
Generally, this involves rate reductions of about -10 bps.
But is also involves the removal of their one year 'special' of 5.25% which will end at the close of business this week. This move effectively raises their one year rate by +24 bps for that term.
Wholesale swap rates took quite a tumble yesterday which might open up some room for banks to lock in money that could support even lower home loan rate offers.
Of special note is that the two year swap rate is now as low as it was in June 2013. Back then, there were a number of carded mortgage rates just below 5% in a similar situation as currently. But this time, more banks might push lower.
Always remember, published carded rates are the starting point when you negotiate rate with a bank and with a strong proposition (low LVR, strong income, a wider asset base behind you) you should easily be able to gain a lower rate. However, without these benefits, or for arrangements like bridging loans, interest-only, etc. you may well find the bank will seek to set a higher rate than the carded indication.
Keep an eye out later today to see if any more banks announce changes of their own.
These rates will compare as follows on Monday morning if there are no other changes announced in the meantime:
| 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% | 5.09% | 4.99% | 5.39% | 5.75% | 5.60% |
 |
6.40% | 5.49% | 4.99% | 5.59% | 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% | 5.85% | 5.85% |
3 Comments
None of it helps when annual GDPE growth for the year ending Mar 2015 is reported at 3.9701% - the cost of finance at a national level is a significant real cost to those executing leveraged endeavours - no inflationary economic impulses to dilute the impact - 1 yr+ term depositors who sought out the right bank are the winners most likely to support future expenditure.
GDP Expenditure, csv data liftout from Stats NZ (opens in excel)
The assumptions underlying my claims originate from a link in this response to Kate on another thread
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