Kiwibank is the next bank to raised fixed home loan rates.
It has moved up to the levels of key rivals with 20 basis points or 30 bps increases.
But Kiwibank's one year rate at its new level of 3.69% is actually the highest of any bank.
Still, that is the bank's only rate left below 4%.
But after the market reactions to the Omicron virus and spread, wholesale swap rates dived on Friday and are likely to remain soft until financial markets are able to assess the impact this will have on the global economy. That means these Monday Kiwibank rises may be the last for a while.
The sudden fall in wholesale rates probably won't bring a change in the set carded rates. But it might give front-line bankers more room to negotiate as the rush to close deals ahead of the holiday break takes place.
Regular readers will recall that December 2020 and January 2021 were unusually active in the housing market, especially in Auckland. After unusually quiet transaction levels in September and October 2021, there will be bankers and real estate agents hoping for a catch-up over the holiday period.
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 29, 2021 | % | % | % | % | % | % | % |
| ANZ | 4.00 | 3.65 | 4.15 | 4.35 | 4.75 | 5.65 | 5.85 |
 |
4.19 | 3.65 | 4.09 | 4.35 | 4.69 | 4.95 | 5.19 |
 |
3.89 | 3.65 | 4.09 | 4.35 | 4.69 | 4.89 | 4.99 |
 |
4.19 +0.20 |
3.69 +0.20 |
4.35 +0.20 |
4.69 +0.20 |
4.99 +0.30 |
5.15 +0.30 |
|
 |
4.19 | 3.65 | 4.05 | 4.35 | 4.69 | 4.79 | 4.95 |
| Bank of China | 3.49 | 3.49 | 3.69 | 3.99 | 4.45 | 4.65 | 4.85 |
| China Construction Bank | 3.65 | 3.65 | 3.85 | 4.35 | 4.65 | 4.95 | 5.05 |
| Co-operative Bank [*=FHB] | 3.49 | 3.29* | 3.89 | 4.15 | 4.49 | 4.69 | 4.85 |
| Heartland Bank | 2.90 | 3.45 | 3.60 | ||||
| HSBC | 3.69 | 3.29 | 3.59 | 3.84 | 4.19 | 4.49 | 4.69 |
| ICBC | 3.59 | 3.29 | 3.59 | 3.85 | 4.19 | 4.59 | 4.79 |
 |
3.79 | 3.15 | 3.45 | 3.69 | 3.75 | 4.29 | 4.49 |
 |
3.60 | 3.60 | 4.00 | 4.30 | 4.64 | 4.74 | 4.90 |
Fixed mortgage rates
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Daily swap rates
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21 Comments
Suddenly, the rise and rise of fixed mortgage rates looks less certain as financial markets recoil at Omicron
In a properly functioning economy, we would expect to see rates rise in response to increased risk, not fall.
I wonder if markets are putting too much faith in central banks' ability to continue socialising that risk.
The increased risks of covid varients -- all point to slowdowns, supply issues, production issues and market disruption --- all requirign increased levels of stimulus to mitigate -- so lower interest rates -- counter intuitive in many ways -- but logical in others
I wonder if markets are putting too much faith in central banks' ability to continue socialising that risk.
Central banking is the economic driver now (have been even before the Covid threat). The sheeples' fortunes will rise and fall on how they feel at the time.
The issue is that it appears that QE has worked. Everyone's been bailed out (kind of). The consequences are not yet obvious, except in monetary debasement.
Interesting on Stuff
https://www.stuff.co.nz/life-style/homed/housing-affordability/30040974…
"Six months ago, Sowry says he gave it a 40 per cent chance property prices would fall. Now, he is 95 per cent certain they will continue to surge for the next two years."
People who need to refix their mortgage in the next 6 months are probably going to get a rate at least 1% higher than what they were paying previously. Worse if they want 2-3 year fix . For a million dollar mortgage. 1% will take approx 16k in Gross Salary. Just to cover the additional interest. $190 of discretionary spending a week removed from the economy. Rates need to rise so they have the ability to be cut again when the time comes and that time will come as sure as night follows day.
Press Release May 2020.
Westpac NZ is offering Kiwis potential savings on their mortgage repayments by cutting a range of home loan rates and introducing the lowest three year rate among major banks.
The two, three, four and five year special rates are as follows:
• 2-year rate reduced to 2.69%
• 3-year rate reduced to 2.79%
• 4-year rate reduced to 2.99%
• 5-year rate reduced to 2.99%
What are the same rates now?
250 billion of Mortgage debt. Refixed at even 1% higher rate will remove 2.5 billion of discretionary spending from the economy. 48 million per week.
Bang on, and with 81% of all mortgages up for refixing within the next 12 months, the OCR lifts will def give more bang for their buck.
Im actually picking they will have to slow it down sooner than they think, as the reduction in discretionary spending kills all the small businesses that have suffered the most through covid as it is.
See my first comment and link
https://www.interest.co.nz/banking/113457/bnz-and-kiwibank-make-market-…
That might depend on when they got their loan and what they set their payments at. For existing home owners, I imagine most would have left (or at least should have) payments at the same as prior levels, thus paying off more principle. So, the increase in interest rate will not impact discretionary spend now, but it will impact how long before the loan is repaid.
Different story for those who are new or who reduced payments to lowest possible. It will bite for them.
We see all these shocking figures of the cost of rising interest rates but have we really come to the conclusion that emergency low rates are now the norm? Rates were always going to go up and people should have factored that in?
When we talk about 'discretionary' spending yes on paper the rising rates are going to have a big impact but when a lot of our 'discretionary' spending is just debt fuelled from mortgage top ups maybe the whole thing was simply unsustainable from the start. This is the price we pay for an 'unsustainable' housing market and massive personal debt?
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