Mortgage rate rises are now coming thick and fast.
Two more banks banks have raised fixed home loan rates.
And one of them has raised term deposit rates as well.
Firstly, SBS Bank has raised all fixed rates except their one year 'special' which remains a market leading 4.19%.
That new low rate was changed on January 21, just three days ago. At that time, they raised their two, three and five year 'special' rates. Today's changes raised them even further.
The SBS Bank two year rate has now risen from 4.54% on Friday to 4.75%. That is a +21 bps rise.
Their three year rate has risen +14 bps to 5.09% over the same period.
The Co-operative Bank has also raised most rates to, all them for terms of 1 year and longer.
They last raised rates on Wednesday, January 18, one week ago. Their rises are +10 bps for all rates changed.
However, the Co-operative Bank has also raised term deposit rates for investors, also by +10 bps, and for all terms of 1 year and longer.
Neither SBS Bank or the Co-operative Bank have changed their floating mortgage rates in today's moves.
These changes follow home loan rate rises by both ASB (who did raise floating rates) and Kiwibank (who raised their floating rate slightly earlier).
None of today's changes alter who has the leading carded rates for mortgage borrowers. SBS Bank and HSBC Premier to lead for a one year term, TSB Bank has the market-leading offers for 3 and 5 year terms with HSBC.
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 | |
4.59 | 4.75 | 4.79 | 5.09 | 5.49 | 5.69 | |
4.49 | 5.05 | 4.79 | 5.09 | 5.69 | 5.79 | |
4.35 | 4.65 | 5.05 | 5.55 | 5.65 | ||
4.49 | 5.05 | 4.79 | 5.09 | 5.69 | 5.49 | |
4.55 | 4.70 | 4.85 | 5.15 | 5.55 | 5.65 | |
4.19 | 4.29 | 4.39 | 4.69 | 5.09 | 5.29 | |
4.19 | 4.75 | 475 | 5.09 | 5.45 | 5.69 | |
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%.
TSB Bank has a ten year fixed rate of 5.75%.
34 Comments
Yawn!
Cooperative Bank?
How much lending on mortgages would they do?
The rate rises are Insignificant at the moment and won't be hurting anyone except,the people who maybe are looking to buy, for serviceability.
Most people will still be fixed at higher than the current rates.
22 months ago i.e. March 2015 fixed rate for 3 years 5.15 %, rates are currently still well under this.
Yes they may continue to rise for a wee while but not dramatically.
United States with Trump at the helm is certainly not going to blossom and the threats of these HIKES is based on not a lot.
Reality has change Sleepy welcome to the Trump Zone! Oh and here are SBS rates as of a few days ago before Mr Trump decided to exit the TPP: http://www.bbc.com/news/world-us-canada-38721056
SBS Bank drops its one year home loan rate by -10 bps to a market-leading 4.19%, raises other 'special rates. Sovereign also raises rates
http://www.interest.co.nz/news/85589/sbs-bank-drops-its-one-year-home-l…
is this normal to raise them so frequently
The drivers for a mortgage rate rise or drop would be the same for all banks therefore, yes, this is normal. Interest.co.nz are reporting as each and every bank raises their rate giving the impression that the interest rate in general is going up every week.
Just making sure people are keeping things in perspective. SBS one year rate is still incredibly low being only 20 bps above the famously low rate of 3.99%. Other increases are very mild. All my current mortgages are higher. Surely this is a matter we can discuss freely?
It would make for a great article.
I understand the vagaries of rates, but the relevance is really disappearing fast. As evidenced by the fact the last two changes have seen little to no change to the variable rate either.
As for fixed rates. The global interest rates are lower still, the credit ratings have dropped a bit for the big four aussie banks, but not enough to justify these increases.
Are the banks in a bit more of a bother than we are lead to believe?
I disagree.
If the RBNZ increases the OCR, the rates will adjust upwards. Alternatively, this is a lead signal that the OCR is on the up.
"As evidenced by the fact the last two changes have seen little to no change to the variable rate either."
This isn't a very good basis when you have 25 years of inflation targeting in NZ..
Of course it will go up if the OCR goes up. That's why an article about how they source their funds would be advantageous for us the consumers.
They hike the rates literally within minutes of an increase in OCR, claiming their funding has gone up, yet OCR drops it turns into - "Oh, ah, we source our funds from overseas, local borrowing from the RBNZ only comprises a tiny portion of our overall lending ability"
It has an eerily similar feel to petrol.
Price of oil (OCR) goes up - price of petrol (Rates) go up
Price of oil (OCR) goes down - price of petrol (Rates) stay the same
Price of oil (OCR) stays the same - Price of petrol (Rates) go up.
I suspect you hit the nail on the head, how much of the increases are due to the parent companies being downgraded and there credit ratings now meaning they have to pay more for the funds they need,
on top of report after report coming out calling Auckland housing dangerously over valued
you do have to wonder why the pace of increases
http://www.interest.co.nz/news/79616/swap-rates-falling-will-banks-be-b…
Back in July when rates went as low as 3.99 on the offer table there was a backroom deal with the main banks that they won't compete below that. Sure enough, now banks aren't really competing against each other anymore - they're all choosy with what customers they would prefer.
In general, Fixed term rates over 2 years are based on wholesale Market interest rates (plus various premiums depending on each lenders own perceived risk in relating to their overall lending portfolio etc)....ie: What our banks have to pay to borrow money from offshore plus risk and margins. These wholesale rates have been slowly increasing since August 2016. The Reserve Bank OCR therefore has very little to do with how Bank's come to their Fixed Rates....OCR is simply an internal NZ rate Mechanism designed to pull unrelated levers for growth, NZ$, trade and treasury, inflation etc.
No real surprise then that (given we have been fortunate that the Bank's kept their Home Loan rates low for as long as they did) that we are finally seeing upward rate movement. News? Perhaps to those that don't follow wholesale rates also....
It doesn't matter what the price of money is (the interest rate) if you have reached your borrowing/lending limit and cannot do any further business. That applies for Households, Commercial Lenders (banks etc) and Countries. Once 'limits' are being approached, what business does get done is transacted at ever higher interest rates as liquidity becomes scarce or dries up.
Higher interest rates might just signal a liquidity squeeze as much as it does a market pricing signal. (The banks are approaching the ability to fund their books in the offshore markets without having to pay a premium to do so)
The major risk to our mortage market probably doesn't come from pricing signals but from liquidity ie: New Zealand's capacity to borrow, into a World that is all trying to do the same thing at the same time.
Nymad no cherry picking here.
When you are running a business which is what we are doing with our rental properties, you make decisions to best suit your business.
If our loans interest rates fixed were up we would fix at the term and rate that we considered best at the time. End of storey.
The 3 year rates are for the Banks interest not ours
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