The home loan update from Heartland Bank today means that there are now no sub-4% mortgages fixed rates left in the market. But there is an exception; Heartland Bank has cut their floating rate which they dropped by a counter-intuitive -25 bps reduction to 3.75%.
This is the first time since August 2018 that we don't have any fixed rates sub-4% (when HSBC offered a 3.99% one year rate. Although at the end of 2015 SBS also offered a 3.99% one year fixed rate briefly.)
SBS Bank also raised its fixed home loan rates across the board, and their floating rate as well.
These are the second fixed rate rises since the RBNZ OCR hike on May 25, and follow Kiwibank's one year rate rise on May 30.
SBS Bank's hikes align them with the levels still offered by the main banks.
But Heartland's hikes still leave them lower than all others, and the only bank offering a sub-5% rate for three years.
Wholesale swap rates have been trending up recently, but that is after they took a detour down following international trends, a dip that most banks didn't follow with fixed rate cuts at the time.
Internationally, the central bank signals are that chunky rate rises are coming from most reviews out past September, so wholesale markets will likely start pricing those in and that could well have a strong influence on local interest rate swap market levels.
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 June 3, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.65 | 4.55 | 4.90 | 5.25 | 5.55 | 6.35 | 6.45 |
 |
4.49 | 4.49 | 4.85 | 5.25 | 5.55 | 6.35 | 6.45 |
 |
4.39 | 4.55 | 4.90 | 5.25 | 5.45 | 5.79 | 5.99 |
 |
5.10 | 4.85 | 5.19 | 5.39 | 5.55 | 5.79 | |
 |
4.59 | 4.49 | 4.89 | 5.19 | 5.49 | 5.79 | 5.89 |
| Bank of China | 4.45 | 4.80 | 5.10 | 5.40 | 5.70 | 5.90 | |
| China Construction Bank | 4.35 | 4.45 | 4.85 | 5.19 | 5.45 | 6.15 | 6.35 |
| Co-operative Bank | 4.29 | 4.29 | 4.85 | 5.19 | 5.45 | 5.75 | 5.95 |
| Heartland Bank | 4.18 +0.33 |
4.84 +0.14 |
4.95 +0.11 |
||||
| HSBC | 4.49 | 4.39 | 4.89 | 5.15 | 5.39 | 5.69 | 5.89 |
| ICBC | 4.39 | 4.29 | 4.79 | 5.09 | 5.35 | 5.65 | 5.89 |
 |
4.65 +0.15 |
4.55 +0.36 |
4.89 +0.20 |
5.19 +0.34 |
5.39 +0.40 |
5.79 +0.34 |
5.95 |
 |
4.45 | 4.34 | 4.90 | 4.99 | 5.35 | 5.55 | 5.75 |
Fixed mortgage rates
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Daily swap rates
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9 Comments
Why must more be coming? As you mention the swaps aren't going up, and except for the 1 year are off their highs and heading sideways. The market doesn't seem to believe that interest rates are going materially higher in the longer terms. It currently only costs the banks 6bps more to secure 10year funding over 3 year. Not quite inverted but a stiff breeze will tip them over.
My guess is if they get people on floating now rather than fixed, when the fixed and floating rates go up again in a few weeks/months, the floating people will be more likely to fix at a higher rate (now imagine if they say in 2 months time we are raising our floating by .75% (a .5 hike plus the origional .25 cut)). More money for them, suckers.
Pretty much a loss leader.
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