ASB has pushed down home loan rates further today.
But it is focusing its changes on terms of 3 to five years only.
It's new 'special' 3 year mortgage rate is now 4.39%, grabbing the market-leading title for this term off of BNZ who announced a 4.49% rate earlier this week.
ASB's 4.39% rate involves a cut of -26 bps from its prior 'special' for this term.
It took even more off its four year rate. That has dropped -41 bps to 4.59% and that is also market leading for that term. In this case it is trumping the HSBC Premier rate of 4.79%.
And for five years, ASB has adopted a 4.79% 'special' rate which is a cut of -36 bps. Previously the lowest five year rate was 4.99% which was offered by Kiwibank, the Cooperative Bank, HSBC Premier and SBS Bank.
These new ASB 'specials' give it a substantial advantage over its main rivals. Against the bank with the largest mortgage book - ANZ - it has opened up a meaningful price advantage which is sure to grab attention at the 'blue bank'.
ASB fixed housing special interest rates require a minimum of 20% equity in the security property provided to ASB. These home loan special rates are not available on loans for business purposes, bridging, or HomePlus.
Rate drops like this one are supported by substantial falls in the wholesale swap rates for these terms which are now well embedded.
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 | 4.39 | 4.59 | 4.79 |
 |
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 | 4.19 | 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%.
15 Comments
There is not a snowball's chance in hell a Bank would price and lock in their loans at rates so low for so long, unless their ALCO committee were really 100% sure of themselves about their funding .
This tells you one thing , the ASB has been able to source a block of depositors funds ( such as carry trade ) from overseas for a very long term at a very cheap rate .
Its QE washing up here like debris from the great GFC
an idea. someone tell me where i'm wrong.
the banks' cheapest source of funding could be to borrow in a QE currency (USD/EUR/JPY) at very low rates, potentially long term, and then hedge the currency risk. e.g. EUR fixed rates + hedge cost + margin = NZ fixed rates.
as the NZD falls against those currencies, hedging the risk of further fall in the NZD becomes cheaper. thus lower cost of capital here, and lower fixed mortgage rates.
?
Time banks got a bit more competitive on floating rates. I'm paying 5.25% but then I am not such an attractive customer as the balances are small and are reducing rapidly. But others last week on interest.co were paying 4.75 on a floating rate. When you hit the bank up for a deal, they will always talk fixed. Because then they have got you on a leash. Don't be diverted. Twist their arms for a deal on floating. You might find it interesting.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.