TSB Bank grabs the market leading two year fixed rate mortage rate off of Kiwibank, driving home loan rates even lower

TSB Bank has trumped all-comers launching the lowest two year fixed mortgage rate today.

At 4.19% it beats the Kiwibank offer for that term by -6 bps.

However it is not as low as the HSBC Premier 18 month rate of 3.95% which is still the lowest rate in the whole market.

And SBS Bank still has their 4.10% one year fixed rate offer.

The TSB Bank rate 2 year rate cut was the only change they made.

At the same time, SBS Bank has lowered all its standard rates by -10 bps although it has not changed any of its 'specials' - yet.

Wholesale swap rates are still falling, pushing new record lows. And banks are raising funds offshore in the covered bonds market, achieving new funding with very low spreads. ASB is the latest to tap this market.

At the end of the week after next the RBNZ will review its OCR settings and markets are picking another cut, although their conviction is showing some strain. Despite this, and the previous action by most banks to hold on to some of the lower costs, sub 4% home loan rates do seem closer.

In fact, it would not surprise me too much if another bank joined HSBC with a sub-4% offer before the April 29 OCR review.

As always, you should try to negotiate a rate lower than the carded rates. Many banks will entertain that to either retain or win your business. But your negotiating strength will very much depend on the quality of your financial position

Here is where fixed rates stand after the TSB Bank reduction:

below 80% LVR	1 yr	18mth	2 yrs	3 yrs	4 yrs	5 yrs
	%	%	%	%	%	%
	4.25	4.89	4.35	4.99	5.20	5.30
	4.15	4.15	4.39	4.65	5.00	5.15
	4.25	4.99	4.39	4.64	4.99	5.15
	4.29		4.25	4.75	4.90	4.99
	4.25	4.95	4.39	4.80	5.09	5.19
	4.25	4.35	4.35	4.65	4.89	4.99
	4.25	3.95	4.39	4.59	4.79	4.99
	4.10	4.35	4.29	4.65		4.99
	4.35	4.35	4.19	4.79	5.35	5.35

In addition, BNZ has a fixed seven year rate of 5.55%, while TSB Bank offers a fixed ten year rate at 5.75%.