Kiwibank is the latest bank to raise fixed mortgage rates.
From Monday, February 6, 2017 all its fixed rates for terms of one year and longer will go up on its rate card.
Its one year rate will rise by +10 bps to 4.45%.
Its two year fixed rate will rise by +14 bps to 4.79%.
The rise for its three year rate is +20 bps to 5.25% and that is now the highest rate for this term from any New Zealand bank.
However, its four year rate it only goes up +10 bps to 5.65%.
Their five year carded rate also rises +20 bps to 5.85%.
Kiwibank last raised fixed mortgage rates on January 9, 2017 (when it also raised its floating rate), and on January 23, 2017.
Here is a way to see 2017 changes from Kiwibank:
| as at Dec 31, 2016 |
January 9 change |
January 23 change |
Today's change |
New rate Feb 6, 2017 |
|
| % | % | % | % | % | |
| Floating rate | 5.25 | +0.15 | ... | ... | 5.40 |
| 6 mth fixed | 4.75 | +0.10 | ... | ... | 4.85 |
| 1 year fixed | 4.24 | +0.11 | ... | +0.10 | 4.45 |
| 2 years fixed | 4.39 | +0.15 | +0.11 | +0.14 | 4.79 |
| 3 years fixed | 4.75 | +0.20 | +0.10 | +0.20 | 5.25 |
| 4 years fixed | 5.30 | +0.15 | +0.10 | +0.10 | 5.65 |
| 5 years fixed | 5.40 | +0.15 | +0.10 | +0.20 | 5.85 |
These changes from Kiwibank are more about positioning against its rivals than wholesale funding pressures.
There were no equivalent term deposit rate changes made at this time
In 2016, wholesale money costs had risen and put margin pressure on banks. But so far in 2017 that pressure has not continued.
Since December 31, 2016, one year swap rates have actually fallen -3 bps, the two year swap has actually fallen -4 bps, the three year swap has fallen -3 bps, and the five year swap has risen +2 bps.
The above fixed mortgage rate rises don't seem to be based on wholesale rate movements in 2017.
Today's changes alter who has the leading carded rates for mortgage borrowers. HSBC Premier has the market leading position for all terms at this time. Other than HSBC Premier, the banks who now have the lowest bank rates include Kiwibank is now in a group of four who offer 4.45% for one year, the Co-operative Bank has the next lowest 18 month rate, and TSB Bank has the next lowest rates for all terms 2 to 5 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 |
 |
4.59 | 4.75 | 4.79 | 5.09 | 5.49 | 5.69 |
 |
4.59 | 5.05 | 4.79 | 5.09 | 5.89 | 6.09 |
 |
4.45 |
4.79 |
5.25 |
5.65 |
5.85 |
|
 |
4.59 | 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 |
 |
4.45 | 4.75 | 4.75 | 5.09 | 5.45 | 5.69 |
 |
4.45 | 4.75 | 4.65 | 4.99 | 5.40 | 5.45 |
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% and that is unchanged in today's update.
5 Comments
On the other side of the equation: After the explicit NZ post (govt) guarantee of new term deposits finishes (28 Feb) that's when I suspect that Kiwibank will increase its longer term term deposit rates. It just doesn't want to issue long term ones at the moment. At the moment, the only good rate is the 1 yr one. That's all.
After that date, the guarantee no longer applies and longer term deposits will be "unencumbered", so they will probably become competitive again.
According to this.
2-3 yrs till 1yr is at 5% and 5yr at 7-8%
http://www.interest.co.nz/opinion/85819/infometrics-gareth-kiernan-sees…
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