Table below updated with Westpac's changes. And further with ASB's changes.
ANZ not only raised its floating rates for home loans following last week's 75 basis points Reserve Bank (RBNZ) Official Cash Rate (OCR) hike. It also raise all its fixed rates too.
The bank made the point that their rates are reviewed "in response to international and local market conditions." The local influences are basically driven for short terms, one year and shorter, by the RBNZ policy settings. The international influences are much stronger on the rates for two years and longer.
And those international influences are clearly driving wholesale rates lower.
So why is ANZ pushing longer rates higher?
ANZ is saying; "With the change in OCR and the expectation that the OCR will now have to go higher next year, there has also been changes in wholesale rates which has an impact on fixed interest rates for home loans."
But a quick check of the swap rate charts below might have you questioning that claim. Maybe some increase can be assigned to that, but 55 basis points? or even 35 basis points? Hard to see.
Two year swap rates are now more than 10 basis points lower than their October levels. Three year swap rates are more than 30 basis points lower. And five year rates are 50 basis points lower. But ANZ has now raised fixed mortgage rates by 55 basis points or 35 basis points. That opens up a rather sharp difference that is not being driven by wholesale rates - yet, anyway.
ANZ seems aware that these fast rising rates will hurt. A spokesperson said the bank was proactively reaching out to customers who showed signs of needing reassurance or support and encouraged anyone who had concerns to get in touch. “People shouldn’t be nervous about talking to their bank, we’re here to support customers with the various options available to them," he said.
ANZ may have to watch what its rivals do now. The expectation is that most of them will fall in line to take advantage of the margin-build that ANZ is permitting.
But there may be some who see an opportunity to grab some market share while the variations are so large.
Between ANZ and (say) BNZ there is a 65 bps difference in BNZ's favour for a two year fixed home loan. For three years it is a 59 bps advantage. For five years it is a 135 bps advantage that a borrower can lock in by not choosing ANZ. These variations at this time are too large to ignore.
We are not saying they will last. They could be gone quickly. But if they do vanish it will not be because of wholesale rate pressure.
In fact, there is a case now for five year fixed rates to be lower than two year fixed rates. It is not unprecedented.
Because variations this large are unusual, the option for one or two banks to test what it will do to borrower behaviour to get a meaningful switch going on might be tempting. ANZ has form in pushing through aggressive rate hikes, only to have to reverse them because no-one else followed. It is rare to be fair, but has happened a couple of times.
And because increasing volumes are being driven by mortgage broker activity, it is unlikely that ANZ will be able to just wish away the trend. Brokers will be much harder-nosed about this than random and independent mum-and-dad borrowers who only get to talk to a bank mortgage manager.
One useful way to make sense of the 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 December 2, 2022 | % | % | % | % | % | % | % |
| ANZ | 6.60 +0.55 |
6.54 +0.55 |
6.64 +0.55 |
6.74 +0.55 |
6.84 +0.55 |
7.54 +0.35 |
7.64 +0.35 |
 |
6.50 +0.55 |
6.54 +0.55 |
6.64 +0.55 |
6.74 +0.55 |
6.84 +0.55 |
6.99 | 6.99 |
 |
5.99 | 5.99 | 6.09 | 6.09 | 6.25 | 6.29 | 6.29 |
 |
5.95 | 5.89 | 6.15 | 6.29 | 6.39 | 6.39 | |
 |
6.49 +0.50 |
6.49 +0.50 |
6.59 +0.50 |
6.69 +0.50 |
6.69 +0.50 |
6.69 +0.40 |
6.79 +0.50 |
| Bank of China | 5.75 | 5.85 | 5.95 | 5.95 | 6.15 | 6.15 | |
| China Construction Bank | 6.50 +1.00 |
6.54 +0.55 |
6.64 +0.45 |
6.74 +0.45 |
6.84 +0.45 |
6.85 | 6.85 |
| Co-operative Bank [*FHB special] | 5.79 | 5.69* | 6.05 | 6.15 | 6.29 | 6.39 | 6.49 |
| Heartland Bank | 5.75 | 6.05 | 5.95 | ||||
| HSBC | 5.79 | 5.94 | 6.04 | 6.09 | 6.19 | 6.59 | 6.69 |
| ICBC | 5.75 | 5.75 | 5.85 | 5.95 | 6.05 | 6.29 | 6.39 |
 |
5.85 | 5.89 | 6.05 | 6.09 | 6.19 | 6.29 | 6.29 |
 |
5.79 | 5.79 | 6.09 | 6.15 | 6.29 | 6.39 | 6.39 |
Fixed mortgage rates
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Daily swap rates
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