Kiwibank raises fixed home loan rates, adding impetus to key mortgage rates rising to 11-year highs. But no bank has yet followed wholesale rates into an inversion

Despite the wholesale swap rates inverting, and the one to five year difference sinking to a sharpish negative 90 basis points, that is, the five year wholesale swap rate is 90 bps lower than the one year rate, banks are maintaining their positive rate curve for home loan rates.

They are keeping their fixed one and two year home loan rates lower than the three to five year fixed rates, even if they are allowing some flattening.

Today, Kiwibank became the final major mortgage lender to raise fixed rates, adding 50 bps to one, two and three year terms, and adding 40 bps to longer rates. They are effective on Monday, December 12.

Essentially Kiwibank's pitching its rate card just under the averages of their big Aussie-owned rivals.

The "headline rate" is the 6.39% one year offer which is priced 10 bps lower than BNZ and Westpac, and 15 bps lower than ANZ and ASB.

But Kiwibank's two year carded rate is now 6 bps higher than BNZ's latest rate for that term. And Kiwibank's three year fixed rate is 10 higher than equivalent offers from both BNZ and Westpac.

All rate cards are compressing and the differences between the majors are minor. However, one, two and three year rates are on average at 11 year highs.

Whether the wholesale inversions motivate any banks to strike out with inverted retail rates is yet to be seen.

The 2022 spring/summer real estate selling season has been weak (some may say, dire), so perhaps hunkered-down banks are in a defensive market-share mode, knowing rivals will fight hard not to lose customers. The opportunities for market share growth are harder to achieve when everyone realises the zero-sum nature of the environment.

So if that is the case, the chances of one major breaking from the pack is low. And with the holiday season break upon us, little is likely to happen before the February return of house selling in a season that will run until Easter in mid-April.

We should also note that Kiwibank increased its term deposit offers sharply about a week ago. But that just took them up to me-too levels, mostly matched by at least Westpac.

With loan demand low, and the Funding for Lending Programme window now closed, other more general market forces will start to come back as the major influencer.

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 12, 2022	%	%	%	%	%	%	%
ANZ	6.60	6.54	6.64	6.74	6.84	7.54	7.64
	6.50	6.54	6.64	6.74	6.84	6.99	6.99
	6.49	6.49	6.59	6.59	6.69	6.79	6.79
	6.50 +0.55	6.39 +0.50		6.65 +0.50	6.79 +0.50	6.79 +0.40	6.79 +0.40
	6.49	6.49	6.59	6.69	6.69	6.69	6.79
Bank of China		5.75	5.85	5.95	5.95	6.15	6.15
China Construction Bank	6.50	6.54	6.64	6.74	6.84	6.85	6.85
Co-operative Bank [*FHB special]	6.29	6.19*	6.49	6.59	6.59	6.69	6.79
Heartland Bank		5.75		6.05	5.95
HSBC	6.44	6.44	6.59	6.69	6.79	7.29	7.39
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