A new week, and more home loan rate cuts - but only for longer fixed rates.
Today Kiwibank trimmed all its carded fixed rates for terms two years and longer.
And TSB cut its two and three year fixed rates.
This changes are essentially matching changes the big Aussie home loan lenders made to their rate cards late last year.
But they do extend the downward pressure on home loan rates across a wider set of lenders.
And they respond to generally lower wholesale swap rates. These sank first mid December and continued to fall through to the end of the year. But in 2024 they have been rising again, but only back to the December 15 levels.
Mirroring these home loan retreats, both Kiwibank and TSB have trimmed their term deposit rates. Kiwibank has taken -10 bps or -15 bps from TD offers of 2 year and longer. TSB has taken -10 bps to -30 bps from TD offers from 18 months to 5 years.
Obviously you should negotiate and shop around. Most banks will discount their carded home loan rates if you have strong financials. You shouldn't need them but if you are uncomfortable negotiating, a broker can often be helpful. But be aware some brokers won't offer you the best over the whole market, only the banks they have approved connections to in their "lending panel." And clearly bank mobile managers are there to pitch their company's own product.
They may even offer savers higher than carded rate offers.
Challenger banks usually offer better rates - although not always mainly because most lack ready access to wholesale markets.
One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is 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. They will become important in a falling market however.
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 January 15, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.35 | 7.39 | 7.15 | 6.89 | 6.75 | 7.34 | 7.34 |
 |
7.45 | 7.45 | 7.15 | 6.89 | 6.75 | 6.75 | 6.75 |
 |
7.39 | 7.35 | 7.15 | 6.89 | 6.79 | 6.75 | 6.75 |
 |
7.39 | 7.35 | 6.89 -0.16 |
6.75 -0.14 |
6.69 -0.10 |
6.59 -0.20 |
|
 |
7.39 | 7.39 | 7.19 | 6.99 | 6.75 | 6.69 | 6.49 |
| Bank of China | 7.09 | 6.99 | 6.89 | 6.79 | 6.69 | 6.59 | |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.39 | 7.35 | 7.15 | 7.05 | 6.75 | 6.75 | 6.75 |
| Heartland Bank | 6.99 | 6.89 | 6.85 | 6.65 | |||
| ICBC | 7.19 | 7.05 | 6.95 | 6.85 | 6.59 | 6.49 | 6.49 |
 |
7.55 | 7.55 | 7.25 | 7.15 | 6.79 | 6.79 | 6.79 |
 |
7.39 | 7.39 | 7.19 | 6.89 -0.20 |
6.75 -0.10 |
6.79 | 6.79 |
Fixed mortgage rates
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Daily swap rates
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Comprehensive Mortgage Calculator
23 Comments
But they do extend the downward pressure on home loan rates across a wider set of lenders.
There’s an old saying, money makes the world go around. Like so many other truths, neoliberalism has subtly but decisively altered this one too. The adage of the neoliberal age can be said to be “debt makes the world go around”. Indeed, debt is not just making the world go around, it is making it spin madly. So madly that the possibility that it will spin out of control is ever present. Everywhere you look, there’s a debt crisis. There’s a student debt crisis, the mortgage crisis of 2008 never really went away, there’s the commercial real estate crisis, there’s a government debt crisis, and of course, there is the crisis of housing. I mean credit card debt, Auto debt, etc. To keep the debt cycle going, the Federal Reserve is even changing its decade-long tolerance of intolerance of inflation. For the Federal Reserve, inflation is acceptable at 3.5%. According to some reports. It would rather tolerate 3.5% inflation than sacrifice the asset markets that keep going up thanks to which have kept going up thanks to low interest rates, and it doesn’t want to take interest rates beyond a certain level. Raising interest rates at this point means making it harder for asset markets to go up and stay up, and that’s why the Federal Reserve is going to cut interest rates no matter whether it’s managed to solve the inflation problem or not. Link
If we choose to not have kids, its not our problem. Fertility rates in most of the planet have all fallen below replacement value. Its up to the Africans and Indians now, it will be their problem.
https://www.dailymail.co.uk/health/article-12947149/Shocking-93-countri…
When I was at Uni in the 90’s banks would offer a $500 interest free overdraft to attract your custom. I was continually in O/D so suited. At the same time the student government loan scheme came in. Many of the people I went to uni with would take this out each year to go skiing at Christmas. So when this generation left uni it was tied in to the bank and to the government with personal debt. It seems from then on in this debt has been restructured in a variety of ways. First from gapping it overseas for an OE and avoiding payment, then back to NZ into work and an eventual mortgage. The student debt would be repackaged into the Mortgage as equity improved in the house etc. all the while growing debt, never paying it down. So now we have a generation of people nearing retirement who have never actually finished paying off a loan. Banks have empowered this by generating this whole “mark to market” of valuing your house as a financial asset which is actually a need on the first rung of Maslow’s hierarchy of needs. An aging population will need to offload their houses to cover this debt that’s been building for their whole lives - fortuitously with excess equity thanks to overall declining debt costs and hence asset price inflation over the whole time. But the end game is selling to a lower skilled lower earning cohort of people we are importing to largely look after our above mentioned aging population. End game looks bleak.
Yes, I think it is likely that inflation in NZ will be back under 3% by spring. I also think our economy will be showing real signs of pain by mid year.
I think at least 2 OCR cuts are likely this year, and a further two in the first half of next year.
Obviously the caveat is things don’t blow up big time in the middle east.
All the big players in the Middle East are still talking in the background and abiding by a careful escalation management programme. Evidenced by for example the US and UK hitting Yemen with 150+ guided weapons but the Houthis suffering only five soldiers KIA. Yemen responded by sending one single missile at a US destroyer which the Americans had no trouble intercepting with no injuries or damage. Things will really blow up if the players start hitting each other where it hurts. That's when it gets ugly.
you can still get below the carded rates if you ask. I refixed in August this year for 6.89% for 1 year and I expect to do the same in Aug this year (fix for another 1 year term).
Interestingly I was paying fortnightly on a monthly interest loan (fixed rate). The Bank advised that it would change the monthly interest loan (as per our loan agreement) to fortnightly interest payments in line with our payment frequency which they recently did (negating any benefit to paying fortnightly on a monthly loan). Has this happened to anyone else?
Over the ditch, the Australian banks are now having to repay their cheap covid lending (their version of the Funding For Lending Programme, which btw ended in June 2021 unlike our idiotic RBNZ which continued pumping cheap money into a horrendous asset bubble until Dec 2022). They will need to replace this cheap funding with higher cost wholesale funding thus putting pressure on their net interest margins. So they won't be giving away their mortgage interest any time soon.
I expect the NZ banks will be in a similar situation in the near future.
Considering the RBs messaging to try and reduce inflation late last year, I wonder if they will be happy with this. It seems crazy when we have record high inflation, and the current interest rates historically are still quite low. Lowering interest rates helps push up house prices meaning people have to take out larger mortgages, so it doesn't help first home buyers.
Tad over 50% of mortgages to refix in next 12 mths if I recall correctly...19000 mortgage accounts passed due I think... 17% of mortgages riding on interest only... Job market tightening, plenty of pressure coming... the skeletons are coming out of the closet this year... the Nats will need to pull a rabbit out of the hat?....lol
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