A split in the mortgage market became more pronounced today (Tuesday).
ICBC has joined other Chinese banks offering very low fixed rate 'specials' after splitting their rate card between 'standard' and 'special' offers.
Their new headline rate is 3.18% which is now available for 12, 18 and 24 months, and 3.20% which is avilable for three years fixed.
These new 'specials' represent almost a -60 bps cut from their previous levels.
ICBC are the third bank to offer all rates 1 to 5 years below 4%, after Kiwibank and HSBC.
The four Chinese-owned banks/branches now have an average one year fixed offer level of between 3.15% (Bank of China) and 3.35% (HSBC). This is far below the range for one year 'special' offers from the main big five (3.55% to 3.65%).
Similarly, these four banks are offering two year fixed rates in a range of 3.15% to 3.35%, and that is also far below the big five main banks who are all on 3.49%.
At the same time, ICBC has reduced its term deposit offers by between -10 bps to -30 bps and now no longer offer any TD rates over 3%.
Here is the full snapshot of the advertised fixed-term rates on offer from the key retail banks.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at October 1, 2019 | % | % | % | % | % | % | % |
| ANZ | 4.29 | 3.65 | 3.99 | 3.49 | 3.99 | 4.85 | 4.95 |
 |
4.29 | 3.65 | 3.75 | 3.49 | 3.89 | 4.19 | 4.29 |
 |
4.79 | 3.65 | 4.55 | 3.49 | 3.99 | 4.35 | 4.45 |
 |
4.79 | 3.55 | 3.49 | 3.99 | 3.99 | 3.99 | |
 |
4.99 | 3.65 | 4.79 | 3.49 | 3.99 | 4.35 | 4.45 |
| Bank of China | 3.99 | 3.15 | 3.70 | 3.15 | 3.79 | 4.35 | 4.45 |
| Co-operative Bank | 3.69 | 3.69 | 3.75 | 3.75 | 3.99 | 4.19 | 4.29 |
| China Construction Bank | 4.70 | 3.19 | 3.19 | 3.19 | 4.95 | 4.95 | |
| ICBC | 4.29
 |
3.18
|
3.18
|
3.18
|
3.20
|
3.99
|
3.99
|
 |
4.65 | 3.35 | 3.35 | 3.35 | 3.35 | 3.35 | 3.35 |
 |
4.29 | 3.65 | 3.69 | 3.59 | 3.99 | 4.49 | 4.49 |
 |
4.35 | 3.69 | 3.69 | 3.59 | 4.05 | 4.45 | 4.55 |
In addition to the above table, BNZ has a unique fixed seven year rate of 5.70%.
All carded, or advertised, term deposit rates for all financial institutions for terms of less than one year are here, and for terms of one-to-five years are here. And term PIE rates are here.
Fixed mortgage rates
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16 Comments
"sub 3% by years end when I float is my dream." as long as you are happy to be where you are for some time....
In principle, I agree with your sentiment, but ask yourself "Why would 2 years fixed by 2.99% in December?". Whatever answer you have, it won't be 'good'. Sure, the repayment of P&I will be less, but given the likely state of the economy by then ( if that timing holds true!) the actual re-sale capacity - the Value if you like - of your house will likely be a lot less.
So (1) Get ready to have-to-hold the property for some time ( fewer and fewer buyers about for all offerings ) and (2) Get ready to explain to your lenders why they should keep the remaining principal they have advanced you unchanged, given (1) when they redo your numbers.
Because the world is awash with cheap money looking for a home.
My LVR is 30% based on 2017 RV's and DTI is 3:1. Never going to sell so I am a lenders dream.
Unless there is a 60-70% price crash and 30% unemployment (which I presume you a praying for) I am not too worried. The extra $250 a week in the hand I get with a 3% mortgage rate however is making me salivate.
And what you outline is EXACTLY how it should be for a family home!
Sadly, many borrowers aren't in your situation/have your good figures, so you have no argument with me on how your situation is. And....
No, I am not looking forward to mass unemployment, but the chances are, it's coming. And those who have continued to leverage-up any and every dollar of their new-found 'wealth' that their property portfolio has offered up by buying another 'renter', or just plain spending newly minted mortgage debt, are likely to find themselves in strife.
I have no real idea where 'things' will end up, but I do fear is that it will be a far, far worse a place than even the most 'optimistic' of us might anticipate. That's why the World is 'awash with cash' - and it isn't working. You look like your ready for it, as am I, but I'll suggest that many of our neighbours don't have a clue...
Unless there is a 60-70% price crash and 30% unemployment (which I presume you a praying for) I am not too worried.
Well I'm just speculating, but I would say a 20% "crash" and 10% unemployment would be much worse for the economy than most people realize.
Because the world is awash with cheap money looking for a home.
Does that mean buy NZ houses at any price? Doesn't really make any sense, but open to hearing the reasons why.
Yep, see https://www.interest.co.nz/banking/100987/rbnz-analysis-shows-big-4-nz-…
Because the NZ branch pays its profits to its foreign parent (is this news to you?).
In the comments on a previous article, someone claimed that ICBC, HSBC et al. are able to have a different funding profile from the major banks, who are required to fund using deposits. e.g. that the funding cost for the first group is determined by bond prices, while the latter by term deposit rates. Is this correct, and can someone elaborate?
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