With wholesale interest rates no longer rising, especially at the longer end of the term spectrum, some local banks have taken the opportunity to tweak their home loan rates lower.
This is in contrast to others who have shifted floating rates higher. Kiwibank has added +10 bps to theirs taking it to 5.80% and SBS Bank has adjust up by the same amount to 5.89%.
On the fixed rate front, the changes have been going the other way.
TSB Bank has shifted its 'special from two years to three years. Their new fixed three year 'special' rate is an attractive 4.99%, a -16 bps cut from their previous 'special'.
However, they have ended their hot 4.49% two year 'special', and reverted that rate back to 4.79%, a +30 bps correction.
And at the same time they raised the rate for their unique fixed ten year option, taking it up from 5.99% to 6.20%, a +21 bps rise.
Kiwibank has announced that effective Monday, their three year 'special' rate will drop to 5.09%, a -14 bps reduction. At that rate, it will just match the 'special' rates for all their main bank rivals (except ANZ).
The Co-operative Bank also changed rates this week, cutting their four year "owner occupied" rate by -10 bps to 5.55%, and made a similar reduction to their five year "owner occupied" rate to 5.75%. The same reductions apply to their standard rates for these terms.
The result of all these changes sees ASB and Kiwibank hold on to the lowest offers for one year fixed (other than HSBC Premier, who has the lowest overall rate card for almost all terms).
For an eighteen month term, the lowest carded rates are offered by ASB at 4.70%.
For two years fixed, the lowest is 4.79% from BNZ, Kiwibank, and still TSB Bank, even after their recent rise.
For three years, TSB Bank's new 4.99% offer is now market leading.
For four years, you can't ignore ASB's 5.59% offer.
For five years, Westpac's 5.59% 'special' stands out for this term. It even matches the HSBC Premier rate.
See all banks' carded, or advertised, home loan interest rates here.
Here is a snapshot of the fixed-term rates on offer from the key retail banks.
below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
% | % | % | % | % | % | % | |
4.99 | 4.55 | 5.15 | 4.85 | 5.59 | 5.89 | 6.09 | |
4.95 | 4.45 | 4.70 | 4.84 | 5.09 | 5.59 | 5.79 | |
5.35 | 4.59 | 5.05 | 4.79 | 5.09 | 5.89 | 6.09 | |
4.99 | 4.45 | 4.79 | 5.09 | 5.75 | 5.99 | ||
5.25 | 4.59 | 5.15 | 4.85 | 5.09 | 5.89 | 5.59 | |
4.80 | 4.59 | 4.75 | 4.85 | 5.25 | 5.55 | 5.75 | |
4.85 | 4.09 | 4.09 | 4.29 | 4.89 | 5.29 | 5.59 | |
4.99 | 4.59 | 4.85 | 4.85 | 5.25 | 5.65 | 5.85 | |
4.85 | 4.55 | 4.75 | 4.79 | 4.99 | 5.65 | 5.79 |
In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.
And TSB Bank has a ten year fixed rate which has been raised by +21 bps to 6.20%.
42 Comments
Wonder who sold them your data? Unless you opted in somehow.
They are just a broker group and I see on their website there's a bunch of disclaimers that these are indicative rates they *think* they can get. A cynic might say that when sales numbers drop, they need another source of income via refinances. ;)
We live in a 'new normal'. Since 2009, the 'old normal' economic conditions do not apply.
ZIRP, QE, housing hyperinflation, asset inflation, hollowing of the middle classes, immigration prime-pumping, Aucklandisation of NZ, Corporate control of resources, student debt, etc.
if another GFC eventuates, or the escalation of War, and/or housing declines, we could well be looking at mortgage rates of 3.x.
I've never bounced from one bank to another for a different rate , it's been the anz and bnz for 40 years, I have haggled and it's been ok, everything I own is in a trust so I dont like changing things to much, but still after about 30 years of having different mortgages at different times I can't see nz,s rates going much less than 1% from now, I've never seen it but like I said I don't really shop around
You are correct Q4 - cutting the OCR again will not do anything to rates (on the downside anyway) - go check out what happened in the period from when the RBNZ starting cutting again in 2015 - savers deserted banks to go into equities, commercial and residential property where yields were and still are far better. Deposit rates went up, bank funding cost rose, mortgages rates remained the same. Another cut would probably be the final straw for many of the remaining savers/investors, and that would well trigger a rate rise almost for sure.
Businesses have been experiencing rises in rates for the last 6-12 months because of this and the last thing needed is something to trigger further desertion of banks and higher funding costs for banks - unfortunately some on here have no understanding of what actually impacts interest rates, but equally unfortunately, seem to be the most vocal.
Rates ARE higher now than the same time last year. Fixed and Floating. Perhaps not the quantum that they could have increased (although there has been volatile periods where people may have been caught out)
It is fair to say they are two sides of the same coin - if credit growth outpaces deposit growth and deposits need to be attracted, rates (deposit and lending) will increase, outside of fundamental shifts in wholesale rates.
I don't know anything about banking but as far as housing to interest rates, with the lifting of rates over 2005 to 2008 in nz would have slowed things in the end if it hadn't been the GFC and house prices would have gone wild like now if not gone to 9%, and must have helped by dropping rates from 9% to 4.5% from 2008 to 2012 giving home owners a lot of needed help, 4.5% of help and house hold dept must have been heaps lower than now and we're lucky to get 1% in interest rate help, I must be old school because I just can't understand it all
Even the mainstream media is floating the idea of interest rate cuts
https://www.stuff.co.nz/business/95473097/door-opens-door-a-crack-to-fu…
Problem for borrowers of course is, 3% something doesn't work for savers and they do care to take their money away from banks who are the ones funding the mortgages - barring a GFC2 banks funding costs will not go down no matter what the RBNZ does (but a GFC2 could also raise them), and increasingly credit will become harder for new borrowers to obtain until the neglected savers again feels comfortable.
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