ANZ is the first to move its floating home loan rates after the RBNZ raised its Office Cash Rate (OCR) on Wednesday.
New Zealand's largest home loan lender said it will raise equivalent rates by the full +50 basis points, effective from Tuesday, October 11 for new business, and from Tuesday, October 25 for existing borrowers and for all revolving credit accounts.
That means their floating home loan interest rate, Flexible home loan interest rate and Blueprint to build (the discounted floating rate for people building their own home) will go up +0.50% pa to 7.34% pa, 7.45% pa and 4.58% pa respectively. They point out that around 90% of their home loan balances are on fixed rates and at this stage these are unchanged.
In addition ANZ's business floating and business overdraft base rates will also go up +0.50% as well.
These new rates above 7% are the first time any mortgage rate has been above 7% sine October 2014 when both ANZ and TSB had 7% rates for a five year fixed term.
Savers aren't getting the full impact however. ANZ says its Serious Saver account rate is only being raised by +40 bps to 2.70% pa. Update: This increase won't apply until Tuesday, November 1, 2022 however.
Now that ANZ has moved, we expect most other banks will now do so quickly.
Here is the running tally of bank changes to floating rates which we will update as each announcement is received.
| Floating mortgage rates | Prior rate | change | New rate | Existing customers, |
| % | bps | % | effective date | |
| RBNZ OCR | 3.00 | +50 | 3.50 | 5 October 2022 |
| ANZ | 6.84 | +50 | 7.34 | 25 October 2022 |
| ASB | 6.84 | |||
| BNZ | 6.79 | |||
| Kiwibank | 6.50 | |||
| Westpac | 6.85 | |||
| Cooperative Bank | 6.65 | |||
| Bank of China | 5.45 | |||
| China Construction Bank | 6.50 | |||
| Heartland Bank | 4.99 | |||
| HSBC | 6.79 | |||
| ICBC | 6.00 | |||
| SBS Bank | 6.79 | |||
| TSB | 6.75 |
We will separately report the fixed rate increases when some arrive.
86 Comments
Fixed changes will happen when the majority have already refixed. Then the retail banks will start to hike fixed rates.
This will be timed as well as it possibly can to prevent defaults. To protect recent FHB and also the bankers' property investor buddies I'm sure.
If you aren't able to grab a ticket for this train before it leaves the station, then that's unlucky for you.
The Seal has been Broken. This is how the Scroll reads.
Interest Rates will continue to go Up from here and Stay Up for a Long Time.
Banks will sell Mortgages at 10% +. ( Double Digits ). The OCR Forecast Peak Goalposts will continually be Moved Higher and Higher ! 10% Interest Rates Next Year, Guaranteed !
The World will go into the Biggest Financial Crash Ever Recorded !
There will be many many examples here in NZ of Property that once sold for $1,000,000 Sell again at $200,000 or less. -80% Crash in Home Prices will be common. This will take time to play out.
It is NOT about High Interest Rates to Fight Inflation. It IS about High Inflation to Justify High Interest Rates. Ponder on this before the Seal is Broken on the Second Scroll.
The Prophet.
7% Interest Rates this year seemed unbelievable when The Prophet first Prophesied this. But here we are only a few short months later. 10% is coming !
Don't be fooled when you see Swap Rates lower the Interest rates, it's only for a moment. The OCR will continue to Drag Mortgages Higher and Higher.
Once again this will be met with scorn from some, but remember what degree the Vested Interest will go to when their lives depend on Rising Property Prices.
If you need or want to sell then do it Now. Make your Asking Price more attractive than your neighbours. First Offer is usually the Best. Consider selling privately, pass on the agent savings to the new owner, you will both win.
First Home Buyers and Investors need to Wait Wait Wait. You will be rewarded for your Patience .
The Prophet brings the Warnings not to scare people but to Help Prepare the people for what is coming.
The Messenger.
Now that The Prophet and the Messenger have both passed to the other side, I the Apprentice have been anointed to Fight the Good Fight.
The Apprentice.
Special Thank You to the Legends of the Faith. For you have Fought the Good Fight.
The Prophet would be very Proud of You all !
St Landers - Why buy today when it will be cheaper Tomorrow ? St Landers of Cheaper Tomorrow.
Father Fitzgearld - Ferocious Fighter For Financial Freedoms Of Families.
Reverend Retired Poppy - Relentlessly Rebuking the Reprehensible Realtors.
Illui Independent Observer - Independently Investigating Intelligence Information.
Deacon DDDDebt - Deeply Discouraging the Desperate from going Deep into Debt.
Incumbent Inkimpaul - Identifying Increasing Irregularities In Institutes Illusions.
The Apprentice.
Is this the resurrection of the prophet or the rise of one of his disciples?
https://live.staticflickr.com/65535/47633739151_fd8fbac495_b.jpg
Or Alferd Packer from Cannibal! The Musical:
“Probably the most important thing is that when things get really bad and the world looks its darkest, you just have to throw up your hands and say "Well, alright!" cause it's probably gonna get a whole hell of a lot worse.”
When can we get rid of Homes.co.nz. In our area two RE companies have told me that firstly that “the algorithm is wrong” and secondly “that Homes is a year out of date” because it shows the prices surging up, when HPI and all other indicators have our prices decreasing along with everyone else. Both buyers ( who want to list at the Homes price) and buyers ( the odd one paying the Homes estimate) are confused and mislead.The whole thing is immoral
Not sure why homes would upset you so much when you can fix it if it bothers you that much. My place down here in Tauranga now has the mid point sale price just above the latest RV. Wouldn't sell it for that anyway because the location is irreplaceable and it would cost way more than that now to build new.
Residential housing is not a liquid asset. It will take a few more months before the 30% decrease (in nominal terms) begins to appear, in Wellington first and then in the rest of the Country. In real terms, I would expect an overall decrease by at least 40%, which would only bring prices down to some kind of sustainable level for the first time in many years.
People have had 6 months to break and refix their mortgage. The RBNZ have never been clearer that they were going to raise rates, I mean were you waiting for the e-mail to confirm it or something ? Another 50ps rise in November, those people now in car smash or heading for one this year were asleep at the wheel.
We sold our place a few months ago. Took ages to sell and was on a long chain and subject to sale of.
We also sold to a divorcee who was in a position of having to buy. That one cash buyer that set the whole thing in motion was the catalyst. Those 10% are of vital importance to the function of the market.
Yes,I agree with you DTRH. We were planning to return to NZ next year to retire (as cash buyers), now we plan to hold off til 2025 or 2026 to allow for further falls in the still overpriced NZ property market, and for the dust to settle a bit on the stressed global economy. We can continue to work here in Perth, on good money and cut our hours significantly as Aussie offers great tax benefits inside Aussie super schemes to make it easy for over 60’s to make the same income as they transition to retirement and cut their working hours. Like many kiwi expats here, we don’t have to move and can afford to wait it out until the circumstances are more conducive to the move. Commenters here waiting for the big return of Kiwi expats in next year, don’t hold your breath. Anecdotally, I have just had two younger family members make the move to Aus, and three of my friends in NZ have just had their adult kids move to WA, QLD, and SA in past year. All have bought good sized homes and are earning about 30 to 40 % more here. No brainer in their most productive working years. We love NZ and want to return for family reasons, but are not prepared to throw silly money away to do it based on sentiment.
Okay so ANZ raises floating loan rate by 0.50% ... and boom they just printed another $10.186mio in profit (minimum)
Numbers from June 2022 RBNZ dashboard. ANZ Housing loans $101.864billion, ANZ says 90% fixed and 10% floating = floating amount $10.1864billion - assume they fund all of those loans at their Serious Saver rate (which we all know they don't as some of their funding is a cheap as 0% - cheque accounts with no interest) then the extra 0.10% margin by only lifting by 0.40% instead of the amount they lifted the floating loans by is per annum $10,184,400 in extra profit or $27,907 per day, or enough to fund or conservatively 4x ANZ NZ CEO's annual salary - phew not a bad day's work eh
That depends on whether they need to increase debt provisioning. Keep in mind to increased capital obligations put on banks by RBNZ (which is prudent)
I expect their treasurer funds floating mortgages at OCR rate though, not savings (or TD for that matter) which went up immediately.
Please increase debt provisioning? Have you seen the numbers currently provisioned at 30 Jun 2022 - $135mio out of $101bil
Don't think their treasurer funds all floating loans at OCR as that would be far too expensive when you get funds from other sources much cheaper. In short they are widening their margins and printing more money
If some are feeling that housing market has dropped and is time for turnaround or even flattening, wait for next year as the real effect of rising OCR has not kicked in.
Noe the sentiment is down but it will be real bad when it hit the pocket, which for many will be by next year.
So anyone planing to sell should rush with realistic price
https://www.afr.com/property/residential/house-price-falls-will-acceler…
Surely the moderators will see fit to reinstate the prophet now that his proclamations have come true? He wasn't spamming, he was merely trying to help the spruikers to see the light! It takes a lot to penetrate their eternal hope that NZ is different and that the basics of the relationship between interest rates and the size of the mortgage that can be serviced are an eternal truth.
7% 7% 7% - we shall never doubt again!
I don't know why some are so worried about a 30% fall. It will take 46% drop from the November 2021 peak to undo all gains since 1st January 2020.
Is a 46% drop really a crash?
Or is it a correction to realistic prices?
The ponzi scheme still needs to deflate. Oh there's that word "deflate". I see that word becoming common everywhere in 2023.
Just be thankful you don't live in Uk where your gas prices are 10 times what they were at the start of the year. There's quite a bit of deflating going on in the European economies right now.
But it's ok we won't be effected.
No reason to think they will only drop 46%. I the ireland crash they dropped 60% in some places and i dont think the prices were as overinflated as here. And the economic situation coupled with geopolitics and right-wing-swing wasnt nearly as serious.
One things for sure, there are some real bargains on Trademe at the moment.. people staring selling off unwanted expensive toys purchased in the boom time ? - great bargains for those who were prudent.
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