Westpac kicked off the latest round of home loan rate increases two weeks ago, and is now back with more good-sized rises.
These latest increases range from +10 bps for their six month fixed rate, to +30 bps for their 3 and 4 year carded rates.
And they are still pushing the boat out for the one, two and three year rates to the highest of any of the main banks - in fact the highest of any bank.
At the same time, both the Bank of China, and Heartland Bank raised their rates today. The Heartland Bank rates are still the lowest offers of any bank, even after the increases of about +50 bps.
Some steam has gone out of the wholesale rises in the past few days, but they aren't reversing. These new higher rates are holding.
One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculator which is also below. (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. But break fees should be minimal in a rising market.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at November 5, 2021 | % | % | % | % | % | % | % |
| ANZ | 4.00 | 3.34 | 3.69 | 3.99 | 4.24 | 5.24 | 5.54 |
 |
3.99 | 3.49 | 3.89 | 4.15 | 4.39 | 4.75 | 4.99 |
 |
3.89 | 3.49 | 3.89 | 4.15 | 4.39 | 4.79 | 4.79 |
 |
3.99 | 3.49 | 3.99 | 4.49 | 4.69 | 4.85 | |
 |
3.99 +0.10 |
3.54 +0.20 |
3.89 +0.20 |
4.19 +0.20 |
4.49 +0.30 |
4.59 +0.30 |
4.75 +0.26 |
| Bank of China | 3.45 | 3.19 +0.30 |
3.39 +0.20 |
3.59 +0.30 |
3.99 +0.34 |
4.39 +0.40 |
4.69 +0.50 |
| China Construction Bank | 3.25 | 3.25 | 3.59 | 3.99 | 4.25 | 4.55 | 4.69 |
| Co-operative Bank | 3.34 | 3.34 | 3.69 | 3.99 | 4.24 | 4.69 | 4.85 |
| Heartland Bank | 2.79 +0.44 |
3.15 +0.55 |
3.44 +0.54 |
||||
| HSBC | 3.69 +0.45 |
3.29 +0.30 |
3.59 +0.30 |
3.84 +0.25 |
4.19 +0.40 |
4.49 +0.40 |
4.69 +0.40 |
| ICBC | 2.99 | 2.89 | 3.19 | 3.29 | 3.49 | 3.89 | 4.09 |
 |
3.19 | 2.99 | 3.39 | 3.49 | 3.45 | 4.29 | 4.49 |
 |
3.29 | 3.29 | 3.64 | 3.94 | 4.14 | 4.24 | 4.44 |
Fixed mortgage rates
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Daily swap rates
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22 Comments
I doubt that is the rationale. It will be about margin, last time the 1yr swap was at this rate, the average 12m rate = 3.94%, still some way above even these rates.
https://www.rbnz.govt.nz/statistics/b21-new-residential-mortgage-specia…
If a bank wants to increase the profits on the mortgate portfolio, they can either a) issue more mortgages, b) issue bigger mortgages or c) increase their interest rate margin. a) requires increase in housing stock or taking share from competitors so is hard. b) is what the banks have been doing for years with rising house prices, but now that's slowing it looks like they're moving to c).
The growth in profits must go on
Higher interest rate just means kiwis are worse off as there's less competition for Chinese students and their wealthy parents that buy real estate and to store their illicit wealth from China. With lower borrowing capacity, it just means kiwis are punching wall whilst the Chinese elite just buy all the prime residential and commercial stock in cash at a lower price.
When rates go up by 1%, as they recently have, it doesn't sound significant, but as a percent change going from 2% to 3% is an increase of 50%. Highly leveraged, negatively geared and interest only loans are going to feel this. For P&I loans it won't change amount you have to pay each month too much, but for the 30% of owner occupier loans, and 40% for investors, using IO loans that means the monthly payments have increased by 50%.
I'm sure there are plenty of people with headroom, who haven't borrowed to the hilt, or are paying small mortgages on properties they bought when prices were much lower. But people who used the more relaxed lending limits set by the RBNZ in the past 12 months must be feeling a little uncomfortable.
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