BNZ has joined a group of three banks now offering 4.19% as a two year fixed mortgage 'special'.
And they have also adopted a three year fixed mortgage 'special' of 4.49%.
This 3 year 'special' is actually special (!) because it now is the lowest rate for that term on the market.
And it has opened up a meaningful separation with their main rivals for a 3 year term.
Pointedly, BNZ have not followed Kiwibank with a sub 4% rate for the two year term.
These rate changes have appeared on BNZ's website this morning, but no official announcement has been received from them yet.
Low wholesale swap rates are giving banks the room to make these shifts.
The variation between the highest and lowest carded rates among banks has widened recently, so we expect to see some uncompetitive positions get adjusted lower later in the week. The most likely next bank to move is ANZ.
Last week Kiwibank launched a 3.99% two year rate, and Westpac adopted the 4.19% two year rate.
TSB Bank has enhanced its 4.19% 2yr 'special' rate with a non-rate incentive of $1,000 of New World grocery vouchers.
Non-bank lender Resimac also cut rates.
The full comprehensive list of all home loan carded rates are here.
Here is where fixed rates stand after today's changes:
| 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 |
 |
4.25 | 4.25 | 4.19 | 4.65 | 5.00 | 5.15 |
 |
4.25 | 4.99 | 4.19 | 4.49 | 4.99 | 5.15 |
 |
4.29 | 3.99 | 4.75 | 4.90 | 4.99 | |
 |
4.25 | 4.95 | 4.19 | 4.99 | 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%.
21 Comments
On the topic of impulse control, I think it's a bit like the marshmallow experiment for children. Except this time people are gambling their entire financial future on it.
Although the behavior of those who have been buying up all of the stock could well be compared to a bunch of kids so perhaps there is stronger correlation than I first thought?
Very much so, there is no sophistication to the thinking. There's no understanding of the limits or the risk involved. No diversification.
They could have more marshmallows in the future but they could buy housing now to get in on paying for the exponential growth.
I'd argue that you don't understand the risk involved. It's zero.
Housing is a market rigged by the banks and the government and under no circumstances will sustained price falls be permitted. Prices rachet up, they never drop.
Even Nick Smith confessed yesterday that their idea of success with Auckland housing is to have the inflation fall to "single digits". Just to not have them "rise to fast".
It's a one-way bet. It should be abundantly clear to everyone by now.
I support rules to prevent the banks from lending to speculators or ensure they hold more capital but I don't think it will bring much change to house prices.
I see more and more evidence that the Chinese are a huge part of it. NZ Immigration now have a Chinese language on their website. I go to home builders like GJ Gardener and they have brochures in Chinese. I go into ANZ and they have Chinese staff and Chinese signs. A Chinese man rudely bumps into me so he can stand in front of the FX rates. I asked my work mate where he got his house from; his mother saw it in a Chinese magazine. I have Chinese landlords. Even the dodgy LINZ "survey" showed that there is a huge problem. I'm not even in Auckland or Queenstown and I can see a very real impact.
Then you have the corner cutting building styles where most houses are single story and utilise land poorly.
I have mates borrowing against the farm at %4.6 or better. No wonder ANZ shares are getting hammered.
https://www.nzx.com/markets/NZSX/securities/ANZ?icharts=true
Well today’s markets are markets that increasingly will be dominated by math, not Will Rogers. And negative interest rates are front and center. To explain, let me introduce a twister I first came across during one of my high school math classes known as Zeno’s paradox. Zeno was an ancient Greek who posed the following conundrum: Imagine a walker heading towards a finish line 10 yards away but every step he took was half of the length of the step he took before. If so, even if he walked an infinite amount of steps he could never reach his destination. Mathematically correct but the real world resolution was that Zeno’s walker and everything else that we experience moves forward in full step integers as opposed to fractions. It was a mathematical twist only.
"The recent collapse in worldwide bank stock prices can be explained not so much by potential defaults in the energy/commodity complex, as by investor recognition that banks are now not only being more tightly regulated, but that future Return On Equity's will be much akin to a utility stock."
Gross noted the collapse in bank stock prices after the collapse of Lehman Brothers in 2008: Citi was at $500 in 2007, currently trades around $38; Bank of America at $50 but now trades around $12; Credit Suisse was at $70 and now trades around $13; Deutsche Bank at $130, now around $16, and Goldman Sachs was at $250, and is now at about $146.
Gross warned investors: "Banking/finance seems to be either a screaming sector ready to be bought or a permanently damaged victim of write-offs, tighter regulation and significantly lower future margins. I'll vote for the latter."
http://www.reuters.com/article/us-funds-janus-gross-idUSKCN0W51GI
The FR is high because banks like people in fixed. I'd go floating myself (if I had a mortgage) because i don't see rates going up at all and the banks know this also. With floating they are bound by banking regulations to lower the rate in full accordance with any OCR cut. We are heading to zero and maybe even negative with the rest. Our deluded leaders and the RBNZ seem to think our economy exists in some kind of vacuum immune to the what is happening in much larger economies than our own.
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