After a quiet six weeks of rate changes in the mortgage market, ASB has kicked off this week with some reductions.
However, they are not significantly notable because they basically just represent an adjustment of ASB's carded rates down towards where most of the market has already settled.
ASB has trimmed its card by between 10 basis points and 20 basis points across the board, except for its five-year fixed rate.
But that still leaves them 15 bps higher than Kiwibank for the one year fixed term, 19 bps higher than BNZ for the 18 month fixed term, and 14 bps higher than ANZ for the benchmark two-year fixed term. It is only for four and five year fixed rates where they have any carded advantage over their main rivals.
The mortgage market is basically a zero-sum refi market at present, with the real estate transfer market in an unusual summer doldrums period.
Challenger banks are setting the pace with lower home loan offers, especially the Bank of China who have all their carded rates for fixed terms one to three years at 6% or below. These are advantages of at least 50 bps, or more.
In wholesale markets, the pressure is lower. Since the start of March, swap rates have fallen about -30 bps. But wholesale swap rates were actually lower than they are at present at the beginning or February, so the recent period has been characterised by meandering volatility. From the start of 2023, swap rates are generally -30 bps lower.
When home loan demand is low, the influence of wholesale swap market trends is muted.
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 March 20, 2023 | % | % | % | % | % | % | % |
ANZ | 6.60 | 6.54 | 6.49 | 6.45 | 6.59 | 7.19 | 7.09 |
6.64 -0.20 |
6.64 -0.20 |
6.64 -0.15 |
6.59 -0.20 |
6.59 -0.10 |
6.49 -0.10 |
6.49 | |
6.54 | 6.54 | 6.45 | 6.49 | 6.59 | 6.59 | 6.59 | |
6.50 | 6.49 | 6.49 | 6.79 | 6.79 | 6.79 | ||
6.59 | 6.59 | 6.59 | 6.54 | 6.59 | 6.59 | 6.49 | |
Bank of China | 6.00 | 5.95 | 5.95 | 5.90 | 6.35 | 6.35 | |
China Construction Bank | 6.60 | 6.54 | 6.49 | 6.45 | 6.40 | 6.40 | 6.40 |
Co-operative Bank [*FHB special] | 6.49 | 6.39* | 6.49 | 6.49 | 6.59 | 6.59 | 6.59 |
Heartland Bank | 6.14 | 6.15 | 5.99 | 5.95 | |||
HSBC | 6.44 | 6.39 | 6.44 | 6.49 | 6.59 | 6.65 | 6.69 |
ICBC | 6.39 | 6.25 | 6.29 | 6.29 | 6.39 | 6.39 | 6.35 |
6.59 | 6.59 | 6.64 | 6.59 | 6.59 | 6.65 | 6.69 | |
6.29 | 6.29 | 6.49 | 6.49 | 6.59 | 6.59 | 6.49 |
Fixed mortgage rates
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42 Comments
by IT GUY | 12th Feb 23, 12:23pm
i now have no debt so if I choose to buy another house its pretty easy.
by IT GUY | 27th Feb 23, 5:21pm
I paid off a 130k revolving credit acc today that was at 7.95% interest.... anyone who can must be paying down debt.
I cant follow this storyline. From zero balance to 2 weeks later, I just cleared 130k balance on 7.95% to I get offered below 6.64
Not sure why HW2 takes so much interest in my finances..... Before I cleared the orbit I asked ASB what they could do if it was transferred to a mortgage. They offered below carded. I decided to just transfer the cash onto the orbit debt, , the orbit is still there and I could draw it back down, but for now I am not being charged 7.95%...... as its sitting at zero.....
On Hotcopper, each post discussing a stock requires a disclosure of sentiment (buy, hold, sell) and whether or not you currently hold any shares. Maybe if we do the same on housing articles here and disclose our property portfolio, LVR etc, we can save HW2 the time involved in snooping.
Disc: own home held, ~20% LVR
Not following that line of thought, how does cutting mortgage rates improve cash inflow exactly?
Attracting new mortgage customers = cash going out to settle up with the previous bank.
Existing customers refixing at lower (than last weeks carded) rates = decrease of payments coming in compared to what they would have been at the old rate.
They get the asset on their books, and right now they want the best quality assets they can get. You can't force the bank to give you a loan, they can be choosy about who they give them to.
It will be interesting to see RBNZ's asset quality report for the end of this month - at the end of Dec '22, ASB had the highest dollar value of impaired loans, though Rabobank and Heartland were both higher by percentage.
Us plebians don't get to see where the bank is heading, but with further interest deductibility removal, and house values dropping, you can be sure the bank has a fairly accurate forecast for the next year or two (even if they may state elsewhile).
It will also be interesting to see what happens to their LVR ratio as house prices drop.
It should be alarming that CoreLogic figures are already showing drops of over 27% in some suburbs when their numbers are 3 or 4 months out of date (approx 5% out) and that is before any real effect from forced sales and loss of interest deductibility and interest rate rises have yet to take their full effect.
We are already in the biggest market crash in the past 40 years and it has not even reached the end of the beginning yet. I would bet (almost) any amount that 2023 will show bigger median drops (based on the REINZ HPI) than last year, taking the falls from peak to an AVERAGE of 30%+ ie many many houses will have dropped 40%+ by year end.
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