Home loan sticker-shock is spreading.
And it is affecting challenger banks as well now.
In fact, Monday morning rate card changes have one girding itself, raising its flagship "owner-occupied" rates to the highest in the market. It will certainly be a risk to their home loan business.
The Co-operative Bank has pushed its one year fixed rate up +36 basis points to match all the main banks. It has pushed its two year carded rate to 5.35%, a +16 basis points rise, and also matching the main banks.
And Co-op Bank raised its three year rate sharply too, also to 5.65%.
That now means Co-op Bank no longer has any carded rate advantage over any main bank. It's clearly now relying on non-price advantages to win (or hold) home loan business. And they aren't insignificant - Co-op Bank rates very well in customer satisfaction surveys. Now this advantage will be tested in a tough mortgage market cycle. The separation from TSB's 4.99% two year rate is now high, even more from Heartland Bank.
UPDATE: The Cooperative Bank has now advised its earlier rate advice was in error. The table below has been reworked with the corrected rates. The story above has been revised as noted.
Two other challenger banks also raised mortgage rates on Monday morning - Heartland Bank and ICBC. Specialty Korean bank Kookmin Bank did too.
None of these banks made term deposit changes at the same time, although Kiwibank did raise term deposit rates without adjusting home loan rates.
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 20, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.95 | 4.85 | 5.15 | 5.35 | 5.65 | 6.35 | 6.45 |
 |
4.95 | 4.85 | 5.09 | 5.35 | 5.65 | 6.35 | 6.45 |
 |
4.69 | 4.85 | 5.09 | 5.19 | 5.65 | 5.89 | 5.99 |
 |
5.10 | 4.85 | 5.19 | 5.39 | 5.55 | 5.79 | |
 |
4.85 | 4.85 | 5.09 | 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 - revised |
4.85 +0.36 |
4.85 +0.36 |
5.15 +0.22 |
5.35 +0.16 |
5.65 +0.20 |
6.35 +0.60 |
6.45 +0.50 |
| Heartland Bank | 4.40 +0.22 |
4.90 +0.06 |
5.10 +0.15 |
||||
| HSBC | 4.79 | 4.69 | 5.04 | 5.29 | 5.54 | 5.94 | 6.04 |
| ICBC | 4.39 | 4.45 +0.06 |
4.85 | 5.09 | 5.45 | 5.69 | 5.89 |
 |
4.65 | 4.55 | 4.89 | 5.19 | 5.39 | 5.79 | 5.95 |
 |
4.45 | 4.34 | 4.90 | 4.99 | 5.35 | 5.55 | 5.75 |
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6 Comments
I think it will come down to what type of customer you are, if self sufficient for transactions then likely to go where price is best. If lots of interactions then probably stay.
Interesting parallels to WFH, if you can do your job remotely full time then does that also mean you could be outsourced? But conversely if you work from home full-time and you could do the same for a competitor for more money why wouldn't you?
*following on
Had a discussion recently with people at a Telco whose model is to pay premium but get premium support. I argued that it is more of a commodity now and as long as it works when/how required then you are just throwing money away on over specified product...
Currently investigating breaking and refixing with ANZ, they aren't offering anything better than carded rates, and are threatening to exercise the cash contrib clawback if we leave.
Pity kiwibank has better rates, and a higher cash contrib amount, so we'll still end up a few thousand better off on the cash contribution side of things, and KB refinance package includes their lawyers taking care of the paperwork. Might be moving the mortgage to KB.
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