ANZ's recent home loan rate hike has been followed by one major rival now - sort of.
BNZ has raised three fixed mortgage rates, and trimmed one in a minor way.
But that trimming has opened up a rate variation that borrowers and their brokers will notice.
BNZ took -4 bps off their carded three year fixed rate offer, taking it down to 4.65%. That compares with ANZ's new 4.75% rate for the same term, and 4.69% for ASB, Kiwibank and Westpac. Any rate cut these days is worth noting.
BNZ raised its one year carded offer by +20 bps to 3.85% and its 18 month rate to 4.19%, a rise of +10 bps. Their new one year rate matches the new ANZ rates for the same fixed period, but the new BNZ 18 month rate splits the difference between ANZ and the existing ASB and Westpac rates.
None of these new rate positions challenge Heartland Bank's offers which remain the lowest in the market.
Meanwhile in wholesale swap rate markets, rates inched higher today. The shift is small on a daily basis, but it is worth pointing out that the new 1 year swap rate is now its highest since June 2018, the new two year swap rate is the highest since February 2016, and the three year swap rate its highest since December 2016. This is unlikely to be the peak, even in the short term.
The ANZ and BNZ changes are in response to those wholesale market changes. And those are moving because of what financial markets are expecting the monetary policy authority will do.
Hanging over the upcoming RBNZ policy and OCR review next week are what Omicron will do to New Zealand, and what Ukraine will do to the international financial markets.
But the overall shift up has been all about rising inflation.
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 February 17, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.10 | 3.85 | 4.25 | 4.35 | 4.75 | 5.65 | 5.85 |
 |
4.19 | 3.65 | 4.09 | 4.15 | 4.69 | 4.95 | 5.19 |
 |
4.09 +0.10 |
3.85 +0.20 |
4.19 +0.10 |
4.35 | 4.65 -0.04 |
4.89 | 4.99 |
 |
4.19 | 3.69 | 4.35 | 4.69 | 4.99 | 5.15 | |
 |
4.19 | 3.69 | 4.09 | 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] | 3.39 | 3.29* | 4.05 | 4.15 | 4.55 | 4.89 | 4.99 |
| Heartland Bank | 3.25 | 3.79 | 4.15 | ||||
| HSBC | 3.94 | 3.49 | 3.94 | 4.15 | 4.54 | 4.74 | 4.99 |
| ICBC | 3.65 | 3.49 | 3.85 | 4.05 | 4.55 | 4.75 | 4.95 |
 |
3.79 | 3.55 | 3.95 | 4.10 | 4.55 | 4.74 | 4.95 |
 |
3.60 | 3.60 | 3.90 | 3.99 | 4.35 | 4.74 | 4.90 |
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42 Comments
Yep fair enough. I just think that if we go that low long term are we not just encouraging the sort of loose financial behaviour that has led us to this point? Cheap money has not done us (as in NZ) any favours. Yes individuals will make money but individual wealth but the masses carrying massive debt does not make for sustainable future?
Ha, well I believe there is a limit to everything, 30 years, 50 years or 100 years is a blink of the eye really. We (or more likely our kids) will see I guess. Unfortunately I think a big part of the problem is that we (individuals as well as Governments) only ever look at our time on earth, the next generation may not be as fortunate as we were.
"Governments only ever look at the next three years"
A correction : Politicians only ever look at the next three years.
We need Leaders, who can look beyond but unfortunately we have heaps of politicians but no leader. Jacinda had an opportunity but turned out to be........of the lot.
Just like Lee Kuan Yew, who with his vision transformed Singapore from small town into global financial hub.
https://theconversation.com/how-lee-kuan-yew-transformed-singapore-from…
Current democracy = vote bank politics leading to vested biased interest where anything and everything is done only to get power. Moral and Humanitarian values have been taken over by lie, manipulation and deceit to get vote and what better example than our current government, who has mastered the art and now is one step ahead of earlier national government.
This is byproduct of current form of democracy and is not only prevelent in NZ but NZ can be a posterboy, highlighting malice in current demcratic setup.
In fact current government has done a PhD in..................with flying colours.
No it won't HM, its going to take 2 years to get out of this inflationary spiral so anyone that has already locked in 3% for a 3 to 5 year term has already made the right decision. Current rates are still looking pretty good when you could be staring at 6 to 7 % before things get under control again.
“I’m sure if the RBNZ had said they will keep the OCR steady then swap rates would be lower “
Then why do swap rates rise somewhat in parallel with US rate moves – especially in the shorter duration – somewhat exclusive of the NZ OCR pulse.
I’m not challenging – but it would seem useful to know – a significant number of NZ home owners are knee deep in debt – rates are rising and all things being equal will continue to rise – there seems to be talk/hope of the RBNZ coming to the rescue through holding/lowering their OCR settings – can they in all reality achieve that when Powell may be looking to play a Volcker type crush it strategy?
From what I understand, OCR influences short-term mortgage rates whereas the longer-term ones are affected by the swap rates. However, I would imagine that as the NZD continues to lose value, the RBNZ would need to act and one way to do it would be to increase the OCR.
The swap rate is arguably just a forward projection of the OCR. So the swap rate and OCR are strongly linked (although there are flows which might not make the relationship perfect). However if you want a floating rate the current OCR is more relevant, if you want a fixed rate, the swap rate is more relevant but is still linked to expectations of the OCR.
On this, powerdownkiwi is right too (as you are). We've been dependent on ever greater debt for "growth" for years (decades?) now. We've been essentially living off the wealth of others, completely dependent on it for our luxury. But growth absent that debt...doesn't seem like that's an option or going to spring from anywhere.
A sort of socialism for the companies that need people to buy their stuff.
As an aside, if you want a real fright as to what’s going on in the residential construction world and the sheer number of 2/3 bedroom horror shows coming on down the pike then ….
Have a look at Milldale and Ara Hills at the back of Orewa – if you’re out of Auckland you simply wouldn’t believe it.
Goodness knows how this ends – in all reality these hell holes probably shouldn’t be saved by lower interest rates.
“Hell Holes” more in terms of the intensity of the development and architectural merit or otherwise of the dwellings – not so much in terms of the quality of the builds which I really couldn’t speak to.
Hell holes might be a bit dramatic but I do seriously wonder what some of these areas might look like 5 or 10 years down the track.
Intensity of development is what is required in Auckland. If we keep the "traditional" model of NZ housing of a 3 bedroom house on a 1/4 acre section we will run out of room.
I have no issue with the intensification of our cities. There are some of the townhouses that are designed better than others and are more aesthetically pleasing.
Who is selling three bedroom homes on quarter acre sections in Auckland? That hasn't been "traditional" for decades. Your options are now $900K for 600sqm or a townhouse, that's pretty much it.
People are not unreasonable for wanting a back yard for their kids to play in in the burbs, it's not like they're asking for a lifestyle block on Ponsonby Road. Yet any suggestion of the sort is met with this 'quarter acre' strawman crap that hasn't been relevant since the 1990s if that.
Which is fine.
But it's no reason for people to in authoritarian NIMBYism try to prevent others from building more intensively on their own land closer to the central city. Their NIMBYism has a massive infrastructural and pollution cost that they get others to bear.
You cannot have 3 story high buildings all joined together in 3 or 4 at a time next to old established single story houses. If you want to start this type of rubbish make it a whole new development where they are all the same. Who wants something 9 meters tall stuck barely a meter from the boundary blocking all your sun. Its common sense and you need to respect those that are all ready living there.
Looks like the banks are looking to compete on those moving from their 12 month fixed terms to longer terms.
Either way its really semantics because for those moving from the 2.29% fixed rate on a $500 000 loan to a 4.65 % rate - loan repayments will be up $657 a month - thats a lot of money to come up with if you were tight on your original payments
Going to BNZ at their lower rate will save just $12 a month.
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