More banks are falling into line with carded rate cuts to home loans.
BNZ is the latest. They have adopted the 2.29% one year fixed rate first claimed by Westpac.
But they have also trimmed their two year rate to 2.59% and matching ASB for that term.
It is starting to look like trailing banks are going to do the minimum to remain competitive.
We are awaiting rate change announcements from ASB and Kiwibank, which will surely come soon.
Update: ASB has also now cut its one year fixed rate, also to 2.29%.
Further update: Kiwibank have announced their one year fixed rate will reduce to 2.35% on Monday, January 25, 2021.
Carded rate changes are one thing, but on the front lines, most banks will match the market lows of their main rivals if you ask them (provided your financials are attractive enough).
Currently, the lowest one year rate is from Heartland Bank at 1.99%.
The lowest 18 month rate is from HSBC at 2.25%.
The lowest 2 year rate is from Heartland Bank and HSBC at 2.35% and TSB's 2.49% also undercuts the main bank levels.
Remember, the RBNZ's Funding for Lending program is in place, allowing banks to access money at the OCR's 0.25%.
If banks use that funding line, they can still keep their margins intact with rates down to about 2%.
Only one bank has drawn $1 bln in the FLP line late so far, doing so late last year. $1 bln is enough to fund about 2000 home loans.
In today's move, BNZ did not change any of its term deposit offers at the same time.
One useful way to make sense of these new lower home loan rates is to use our full-function mortgage calculators.
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at this time.
Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
as at January 22, 2021 | % | % | % | % | % | % | % |
ANZ | 3.39 | 2.29 | 2.55 | 2.69 | 2.79 | 3.90 | 3.99 |
3.39 | 2.29
|
2.49 | 2.59 | 2.65 | 2.99 | 2.99 | |
3.39 | 2.29
|
2.49 | 2.59
|
2.79 | 2.99 | 2.99 | |
3.55 | 2.35
|
2.65 | 2.65 | 3.09 | 3.19 | ||
4.15 | 2.29 | 3.25 | 2.69 | 2.79 | 2.99 | 2.99 | |
Bank of China | 3.45 | 2.55 | 2.65 | 2.65 | 2.75 | 2.85 | 2.95 |
China Construction Bank | 4.70 | 2.65 | 2.65 | 2.65 | 2.80 | 2.89 | 2.99 |
Co-operative Bank | 2.49 | 2.49 | 2.69 | 2.69 | 2.79 | 2.89 | 2.99 |
Heartland Bank | 1.99 | 2.35 | 2.45 | ||||
HSBC | 2.79 | 2.25 | 2.25 | 2.35 | 2.65 | 2.79 | 2.89 |
ICBC | 2.89 | 2.89 | 2.45 | 2.45 | 2.65 | 2.89 | 2.99 |
3.39 | 2.49 | 2.49 | 2.59 | 2.65 | 2.89 | 2.99 | |
[incl Price Match Promise] | 2.89 | 2.29
|
2.49 | 2.49 | 2.65 | 2.99 | 2.99 |
In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%.
Fixed mortgage rates
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42 Comments
And coincidentally my last PIE term deposit of many before it at BNZ matures today. It will be going to Harbour's Enhanced Cash Fund with all the others.
I now have less than a tenth of the deposits I had in BNZ and Westpac 18 months ago left. By 1 April every TD will be elsewhere and not with the banks.
I got pretty annoyed with the low interest rates but decided to put a good chunk in Kiwi Bonds-why? The returns are near similar but they are guaranteed by the Gov. We've left some in normal accounts so that should we want to move quickly eg deposit on house, stick some into ETFs as per March this year, we have that facility.
"Reserve Bank figures showing the amount of interest charged on residential mortgages go back to the September quarter of 2014. These show the $2.6 billion charged in mortgage interest in the September 2019 quarter was the lowest it has been in any quarter during that period, and was well below the peak of $3.11 billion in the fourth quarter of 2017."
https://www.interest.co.nz/property/108685/once-threat-covid-recedes-we…
Sort of indicates falling revenue from mortgage lending, it would be interesting to see that graphed.
My investment property is being built and ready for prime time selling in March, when I hope the interest rates from the major banks will be closer to 2.0%. You can't get a better time than this to sell! FOMO + lowest interest rates in history + lack of stock = win win win. Yes, I will be taxed but hey, it's nothing compared to the gains.
Come Feb, and should Labour release a policy that makes it harder to get into property, it would be even better for me personally considering the FOMO levels will be elevated further just prior to any new policies being applied.
Thought... what happens if there's a lot of investors selling at the same time as you with the same thinking. There's got to be quite a few investors getting out of the market around that time due to the new tenancy laws. Could be a lot of stock which could push down prices. Perhaps not the best time to sell after all?
As our tenants' whims change and if they decide to move we'll consider what to do about renting them out. All the tenants are good now, mostly sickness beneficiaries who'll never do formal paid work again. They mostly look after the property and we get maintenance done promptly which they said was unusual in previous rentals. Unlikely they'll now find somewhere cheaper than what they currently pay which is below market, particularly a rental they can take their pets, but if any move I'll have to consider options like air bnb in view of new rental laws.
Can see rental scenario turning into full blown crisis after 11 Feb. Had a young mother, about 18 calling desperate to move in to our rental this week with a new baby, father not on birth cert get more benefit, already got bad credit too so no, sorry, move along.
Albert, how do you know domestic tourists are not compensating ? How many Airbnb's do you own to make such a statement? I own accommodation that I rent out to guests on Airbnb and others platforms and from my experience there are a lot of Kiwis with lots of money to spend on domestic holiday accommodation
Is this responsible RBNZ regulatory oversight?:
Banks extending 60 % of their lending to one third of already wealthy households to speculate in the residential property market because the RBNZ offers them an RWA capital reduction incentive, to do so.
Or this:
RBNZ cutting OCR in half five times since July 2008, causing the rich to capitalise rising discounted present values of future asset cash flows.
I guess we will not see the 1.5% that I predicted several months ago in March 2021 but I'm still a bit surprised to see them still dropping at this point in time, I mean the MSM is banging away on how well our economy is going and how little Covid has affected us right ? So why are the rates still falling. If everything was peachy they would be going up not down to try and rein in house price hyperinflation.
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