ANZ, which is the country's largest mortgage lender with a mortgage book exceeding $67 bln has raised most interest rates, including its floating rate.
It has added +10 bps to its floating rate, taking it to 5.69%.
This change is effective on Thursday, January 19 for new lending, and on Thursday, February 2 for existing clients.
And it has added +10 bps to its revolving credit rates, its "Flexible" plan, taking this to 5.80%.
These changes are effective Thursday, February 2, 2017 for all clients, new and existing.
It has also raised rates for all fixed terms except its six month rate.
These new higher fixed rates are effective Thursday, January 19, 2017.
The increases range from +6 bps to +25 bps.
Their one year 'special' has been raised +20 bps to 4.45%.
Their two year 'special' has been raised +16 bps to 4.75%.
For three years, standard rates apply and the increase is +20 bps to 5.49%.
For four and five years fixed, their rates are up +25 bps to 5.70% and 5.85% respectively.
Although there hasn't been much movement in wholesale swap rates recently; in fact they are down about -1 to -20 bps across the board since December 19, 2016 in a flattening bias. Credit spreads are lower over this 30 day period as well.
ANZ last raised its fixed mortgage rates on December 19, 2016 in a pre-holiday bump. It made some selective term deposit rate changes then at the same time. There are term deposit changes as well, and these are detailed here. This time, we have not yet been advised of any term deposit rate changes.
Today's changes don't change who has the leading carded rates for mortgage borrowers. HSBC Premier still leads for a one year term, SBS Bank now has the leading rates for 2 years, and TSB Bank has the market-leading offers for 3 and 5 year terms.
But ANZ now has the highest carded rate offers for terms of three to five years.
See all banks' carded, or advertised, home loan rates here.
A snapshot from the key retail banks is:
| below 80% LVR | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| % | % | % | % | % | % | |
 |
4.45 |
5.05 |
4.75 |
5.49 |
5.70 |
5.85 |
 |
4.49 | 4.65 | 4.79 | 5.09 | 5.49 | 5.69 |
 |
4.49 | 5.05 | 4.79 | 5.09 | 5.69 | 5.79 |
 |
4.35 | 4.54 | 4.95 | 5.45 | 5.55 | |
 |
4.49 | 5.05 | 4.79 | 5.09 | 5.69 | 5.49 |
 |
4.45 | 4.60 | 4.75 | 5.05 | 5.45 | 5.55 |
 |
4.19 | 4.29 | 4.39 | 4.69 | 5.09 | 5.29 |
 |
4.29 | 4.45 | 4.39 | 4.75 | 5.29 | 5.45 |
 |
4.25 | 4.45 | 4.49 | 4.69 | 5.10 | 5.29 |
In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.
61 Comments
As at the end of November, $146bn out of $232bn of mortgage debt was either floating or up to 1 year fixed.
The cost to jump to 3 years+ fixed is getting expensive. The cost of sitting on floating or fixed short could also be expensive in a years time. Either way it looks like this will flow through quickly.
Does the income serviceability test remain where it was at 7% (or whatever it was) or will that be going up as well? Surely it will now longer rates are approaching 6%.
I thought it was 2% above the top rate, so now will be closer to 8 %
does the raisings have anything to the bid 4 Australian banks being put on negative watch
http://www.news.com.au/finance/business/breaking-news/fitch-downgrades-…
The banks are seriously worried about maintaining their mega profits, they can no longer rely on housing loans so the easy way to make more margin is to "gouge" the customers they have. I can gaurantee the banks will soon move onto their staff and start "restructuring", less staff means makes the bottom line look good. The other banks will follow ANZ, collusion by stealth.
Corporations, banks included, are societal institutions. That is they operate within societies, not apart or separate, or above them. They need societies for their continued existence. To place shareholders interests above those of the society and consumer creates an imbalance that can be considerably damaging. Banks in particular have been ripping consumers off big time for years because of their attitude. it is time for it to change. The consumer has very little protection and limited choice as it is.
Do we place the housing speculator above the investors who owns shares in a bank?
I have a small holding in ANZ along with several other infrastructure businesses, in part because they add value to society and in part because they have a good return (would like ANZ improve its financial performance through).
What value does high debt levels or high housing prices add to society?
Sure banks and many other businesses and individuals profit from the current situation consumers included. There are multiple providers of low risk debt, high risk debt (Auckland house loans) is another matter.
I don't have that much of an issue if they increase their margins to make them stronger, when an economic crisis hits. Supposedly a bank failure is unlikely, but unlike many other countries, we have not deposit guarantee scheme. I wonder if we did, whether the deposit rates would be better in the shorter terms, and on call. It looks like banks are trying to move people from oncall, to locking their money into term deposits.
Nymad,
I have been involved in the stockmarket both professionally(in the UK) and personally(UK and NZ) for over 30 years. Companies that seek to 'protect their shareholders',by putting their interests before their employees and customers deserve to fail. Companies which put their staff and customers interests first,will prosper long-term and thus,look after their shareholders' long-term interests.
You don't sound like a very successful stockmarket investor, then...
Companies that don't protect their shareholders lose a lot of value, and fast.
You say companies which put their staff and customers first will prosper long term, but this sounds pretty counter intuitive given that the two have competing interests...
Staff want higher long term earnings. Customers in the long term seek costs as close to marginal operating as possible.
I'm not sure you will find 'making a profit' as one of their duties.
see https://www.raineycollins.co.nz/your-resources/articles/directors-dutie…
more to the point, in NZ, avoiding OBR for bank directors is more relevant -
"A Director must not agree to the business being carried on in a way likely to cause substantial risk of serious loss to creditors or to cause or allow the business to be carried on in a way likely to create substantial risk of serious loss to company’s creditors."
http://www.express.co.uk/news/uk/755329/Financial-crisis-Britain-braces…
A Happy and Prosperous New Year. to one in 3.....What?..... ever next.
Do not be miserable, nor a poor substitute in 2017.
This is topical;
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…
"Australian research has found one in five Aussies are walking such a fine line on their mortgage they could lose their home if mortgage rates were to rise by just 0.5 percentage points."
This is the problem with taking out a barely affordable 30 year loan, fixing it for maybe 1 year, possibly interest only, and assuming interest rates are low forever, immigration is high forever, Chinese demand is strong forever, new home building remains low forever, NZ avoids recessions, and so on.
Who knows what ANZ really thinks will happen but if there are going to be lots of mortgagee sales you would want to be the first bank to flush out the bad loans (or have risky customers take their business elsewhere) and recover capital while prices are high. It was certainly David Hisco's opinion in his NZ Herald piece that it was going to get messy.
If you've got a 500k mortgage (which is very typical now) then every 1% increase costs you $100 a week. It can get ugly pretty quickly.
But I highly doubt that 20% of Aussies will go under from a 0.5% rise, I think their calculations are way off. Probably based off some theoretically affordable loan to income ratio which doesn't take into account that a persons minimum expenses are a fixed cost, not proportional to their income.
The affordable calculation also doesn't take into account other finance payments such as credit cards and car loans. Those may fit your minimum expense definition or not, but many people apply payments based thinking and keep financing until they can't afford any more payments. That makes them vulnerable to not just interest rate increases but "unexpected" expenses or job loss.
Sorry but it is getting a bit repetitive these small interest rate rises each time a different Bank raises rates.
It is pretty insignificant really when the rises are .1 of a per cent when the rates were lowered we were talking .25 per cent.
2 years ago 3 year rates were over 5 per cent fixed and so many would be on those types of rates, so the current rates are well under those still.
The effected ones will be the people who have been saving and aren't in the property market as it will effect serviceability that the Banks will be using.
No, those effected will be people with mortgages to renew and house buyers, not those who don't own houses. Second order thinking is great, but don't forget the first order...
Those who don't already own houses can look forward to houses being cheaper than they would have been had interest rates fallen further, in the reverse of the recent house price rises partly caused by falling interest rates.
If you find financial news repetitive, perhaps this isn't the best website to browse? For the rest of us it's interesting to keep up with the current direction of travel.
And as has been pointed out before it's not the amount of the interest rate increase it is the effect on the amount that has to be paid due to the size of the loan. Additionally multiple small increases can add up to a significant increase.
It is the same mentality that it only costs two dollars - do that multiple times and it adds up. It seems like a failure to understand the maths.
I think THE MAN 2's point is that reporting every institution's interest rate rise is effectively reporting the same story over and over. If you see a new news item every day saying interest rates have gone up readers get the impression that it is really shooting up when in fact it is not. Nymad has already been caught up in this claiming they are going up 3.5%. It's a type of fake news, not really fake but kind of manipulative.
As I said drops were more substantial than the insignificant rises, and everyday we are getting every Banks small rise being reported including minority lenders.
The Banks raising interest rates are only doing it because they can at the moment for existing lenders.
You will find shortly that this will stop soon as our dollar continues to strengthen against the USD.
That's not how I remember it, the falls came in dribs and drabs too, 0.1% here, 0.25% there, all reported on this site. Possibly fewer articles as they tended to come in clumps after an OCR review.
The reporting has been pretty consistent as far as I can tell, it comes across as rather childish to start complaining about it when it's no longer the outcome you want.
So what's the problem with this article?
"For four and five years fixed, their rates are up +25 bps to 5.70% and 5.85% respectively."
last few OCR cuts were not passed on in full by the majority of banks, as has been well documented and complained about on this site, so many of the drops were significantly less than .25.
So, why is this only a cause for complaint now that it's small rises being reported rather than small falls?
Well, I find it interesting and you don't have to read the article if you don't want to. It's good to have a site aggregating this kind of information. Again, why has this only become a problem now the direction has changed?
No idea on the fixing question, would depend on personal circumstances and risk tolerance. I've fixed for 5 years before and didn't regret the certainty of knowing I was protected from the unexpected. It's important to recognise that not one of us has any chance of reliably predicting interest rates that far out.
...Aren't we in fact talking ~3.5% increase, not 0.25%?
If I were in your position, I'd be getting pretty worried about my future cashflows with the substantial downward pressure on rental yields and property prices in Christchurch, coupled with sustained increases in interest rates.
"The effected ones will be the people who have been saving and aren't in the property market as it will effect serviceability that the Banks will be using."
Really?
So, higher interest rates are bad for savers? Interesting..
Nymad, I wouldn't be worrying about my personal financial position, as at the moment the way interest rates are I am better off as most of my loans are fixed at 5.15 per cent and aren't up for renewal till March 2018.
We own far more of our property than the Banks do so not a problem.
I know, the Banks own them all until the debt is repaid.
The fact is if interest rise dramatically then we just won't have to pay as much tax on the profit and we won't bother with employing people for improvements.
"We own far more of our property than the Banks do so not a problem."
So long as you have an increasing repayment obligation on fixed income or declining income, this doesn't matter.
"then we just won't have to pay as much tax on the profit"
You do understand that means that you are making less gross/net profit, right?
"we won't bother with employing people for improvements"
Deferring R&M costs doesn't mean that they are no longer a factor.
Nymad, if interest rates are lower than what we are payin, sorry but repayments will be less.
Our average return is approx 9 to 10 per cent overall so can't see it being any problem, can you?
Intefest rises would need to be huge for it to be a problem and if that happened then every single one of us would be in the hole and the country knackered.
Necessary repairs and maintenance I would do and therefore I wouldn't employ anyone and so no tax for the country.
The card rate 3 year is effectively what you are paying now - if you are on 5.15%, you fixed longer than 2 years, so how are interest rates cheaper for you now? Unless you are going to fix for a year? Given the amount of titles you imply you have, I doubt that will be the case - hence your original long(er) term fixing.
March 2018 is a year away with a high probability of a couple of OCR rises before then - that will pump the rates up higher than what you are now paying...
Is your average return of 9 - 10% pre or post tax?
Either way, the risk is high that it is going to substantially decrease.
Nymad, yes I fixed for 3 years at 5.15 but have got some at about 4 in the last few months.
2 year rates aware under what I am paying, but I still maintain there is no way that rates that are fixed for a year or two are going over 6 per cent.
Might be wrong but then so might you and I am always comfortable in my decisions.
The Man 2, well done on investing and building a portfolio of houses, I assume that you have mitigated your risk somewhat as you "own far more of our property than the banks", and your loans are fixed until March 2018.
What would happen if, god forbid, interest rates were 8% in March 2018, house prices had fallen by 30% and selling time stretched to 12 months.
If you don't think it is possible to happen, then i assume you won't mitigate against the risk.
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