More banks have rolled out changes to fixed home loan rates, but all the latest revisions are really just tweaks that embed a steeper rate curve.
The latest to change is BNZ who cut their one year rate to match their rivals, and cut their two year fixed rate to 2.55% which is below all the other main banks except Kiwibank.
And they raised their four and five year rates into line with most others.
BNZ is following Westpac who announced changes earlier to their one year rate.
And Westpac followed Kiwibank who changed on Monday. Kiwibank followed ANZ, who in turn responded to ASB which was the bank that kicked off this latest realignment.
Update: Both TSB and the Co-operative Bank have announced changes too, and the table below includes them.
Essentially we are seeing short-term rates (2 years and shorter) being trimmed, with rates for three years and longer are being raised.
This shift is in response to two pressures on wholesale rates. The longer term wholesale rates are rising in response to rising international benchmarks as the global economy makes a surprisingly strong V-shaped recovery.
Meanwhile short term rates are being restrained by the RBNZ; their stand in the secondary bond market to keep yields low, plus their offer of 0.25% three year money under their Funding for Lending program. Most banks except ANZ have availed themselves of a little bit of the $28 bln on offer. So far only $2.85 bln has been taken up however.
One useful way to make sense of these new changed home loan rates is to use our full-function mortgage calculators. (Term deposit rates can be assessed using this calculator.)
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 May 5, 2021 | % | % | % | % | % | % | % |
| ANZ | 3.39 | 2.25 | 2.45 | 2.59 | 2.89 | 3.90 | 3.99 |
 |
2.99 | 2.25 | 2.49 | 2.59 | 2.89 | 3.19 | 3.39 |
 |
3.39 | 2.25
 |
2.49 | 2.55
|
2.79 | 3.09
 |
3.39
|
 |
3.55 | 2.35 | 2.55
|
2.79
|
3.09 | 3.39
|
|
 |
4.15 | 2.25
|
3.25 | 2.59 | 2.89 | 3.19 | 3.39 |
| Bank of China | 3.45 | 2.35 | 2.45 | 2.55 | 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 (*FHB only) | 2.25
|
2.09* | 2.59 | 2.59 | 2.79 | 3.09 | 3.39
|
| 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 | 2.25 | 2.35 | 2.35 | 2.65 | 2.89 | 2.99 |
 |
3.39 | 2.29 | 2.39 | 2.49 | 2.79 | 2.99 | 3.19 |
[incl Price Match Promise]  |
2.89 | 2.25 | 2.45
|
2.49 | 2.79
|
3.09
|
3.39
|
You should note that BNZ no longer offers a seven year fixed rate.
Fixed mortgage rates
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19 Comments
HG
Do FHB actually get a better rate????
All I have heard is that many FHB have been disadvantaged by being required to pay an additional low equity premium whereas generally investors due to their equity (even through leveraging) have not usually been subject to the premium.
Do you have information that differs to this?
Edit: Possibly we are talking cross purposes here and may be in agreement - banks are a business and set rates based on risk. Hence low equity property borrowers pay a higher rate, just as commercial/business borrowers being higher risk still pay considerably higher rates (though business loans vary on risk).
I was responding to Ryu's post which states:
"Hoping to see owner occupier rates drop offset by investor rates rises. Still baffles me that investors get the same rates."
it's clear he thinks investors should pay a higher rate than FHBs. I have yet to see his reasoning for this position.
estateagent
What is your rationale for that call, or is it simply a flippant wild baseless statement.
Your prediction seems at odds with the longer term indicators which are for increasing interest rates - this has been signalled by RBNZ, there has been some upward movements in longer term TD rates, as the economy improves we are likely to see rises in OCR, and a rise in OCR is likely - and supported by many on this site - to cool the housing market.
Current FLP funding is is providing short term downward pressure on mortgage rates but that is already well into the first of three years after which banks are likely need to seek other higher funding.
In your month or two we will see if you are right. Feeling confident?
COH
Agree.
Indications are for upward pressure on longer term rates.
I’m not surprised by this: over the past few weeks I have been posting that the BNZ 5 year rate of 2.99% was competitive and wouldn’t last.
I see that more are now fixing longer term. The days of falling interest rates are likely now over as economic risks and consequences of Covid lessen and RBNZ likely to start increasing OCR over the next few years.
If inflation rises above 3% rates will go a lot higher than that. We just broke and fixed for 5 years at 2.95%. Like many comments above, depending on where you're reading, there's quite a bit of conflicting reporting going on. But consumer confidence in the US has fallen off a cliff and little old NZ are powerless in the face of those markets. If this were a poker game, the FED are bluffing but kept up with the raises and are in so deep they can't afford to fold.
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