ANZ has now found it can't not respond to its rivals having lower carded home loan rates, so it has made cuts of its own.
Like ASB's earlier moves there is some rival-matching going on.
But unlike ASB, it has gone lower on some key rates.
ANZ's now one year fixed rate is now market-leading among main banks at 7.24%, with a -5 bps advantage over the other four.
Its new two year rate now has a -6 bps advantage at 6.79%.
In contrast, ANZ seems prepared to offer marginally lower term deposit rates than its rivals, and has trimmed them for terms 1 year to three years today (Monday). However, to be fair, their new rates are really little-different to what is around from others, although their new 6.00% one year TD rate is the lowest for that term of all their rivals - except Westpac's 5.90% offer. But most activity goes on in shorter terms and ANZ made no changes to those and remains broadly in line.
Wholesale swap rates ticked lower after the dovish RBNZ moves.
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.
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 March 4, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.35 | 7.24 -0.15 |
6.89 -0.26 |
6.79 -0.10 |
6.65 -0.10 |
7.34 | 7.34 |
 |
7.39 | 7.29 -0.10 |
6.89 -0.26 |
6.85 -0.04 |
6.65 | 6.55 | 6.55 |
 |
7.39 | 7.29 | 6.99 | 6.85 | 6.65 | 6.55 | 6.55 |
 |
7.39 | 7.35 | 6.89 | 6.75 | 6.69 | 6.59 | |
 |
7.39 | 7.29 | 6.95 | 6.89 | 6.65 | 6.59 | 6.39 |
| 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 | 7.29 -0.06 |
7.15 | 6.89 | 6.75 | 6.75 | 6.75 |
| Heartland Bank | 6.69 | 6.59 | 6.45 | 6.19 | |||
| ICBC | 7.19 | 7.05 | 6.95 | 6.85 | 6.59 | 6.49 | 6.49 |
 |
7.45 | 7.45 | 7.25 | 6.95 | 6.79 | 6.69 | 6.59 |
 |
7.39 | 7.39 | 7.19 | 6.75 | 6.75 | 6.79 | 6.79 |
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31 Comments
While it is a positive story for many borrowers, the 10bps shift really doesn't make a lot of different.
Being in the high 6's now compared to being in the 3's would be incredible painful. Many will take up the 1 year rates in hope that they drop and also provide them the flexibility to sell.
Or maybe it is wishful thinking to try and get house prices rocketing up again, which seems to be a major way NZers increase their wealth. I heard one property expert at the weekend say that a 1% drop will result in a 10% house price rise, and a 2% drop will be a 20% increase. That is something no 1st home buyer would want to hear, as you potentially get into less debt with lower house prices, by having the current higher interest rates inplace.
It looks like the 18 months fixed will become the new 1 year fixed as the most popular term. Banks are trying to squeeze an extra 6 months out of their customers at the high rate settings.
Negotiation tactic: Ask for the 18 month rate on a 1 year term at the very least.
This is what Milton Friedman called the interest rate fallacy, and it indeed refuses to die. We can tell what monetary conditions are in the real economy, as opposed to financial liquidity, though the two can be linked, by the general level of interest rates. When money is plentiful, interest rates will be high not low; and when money is restricted, interest rates will be low not high. The reason is as Wicksell described more than a century ago:
[The natural rate] is never high or low in itself, but only in relation to the profit which people can make with the money in their hands, and this, of course, varies. In good times, when trade is brisk, the rate of profit is high, and, what is of great consequence, is generally expected to remain high; in periods of depression it is low, and expected to remain low.
When nominal profits are expected to be robust, holders of money must be compensated for lending it out by higher interest rates. Thus, the same holds for inflationary circumstances, where nominal profits follow the rate of consumer prices. During the Great Inflation, interest rates weren’t low at all, they were through the roof well into double digits and higher by 1980. At the opposite end in the Great Depression, interest rates were low and stayed there because, as Wicksell wrote, the rate of profit was low and was expected to be low well into the future. High quality borrowers were given as much money as they could want while the rest of the economy was deprived of funds; liquidity and safety being the only preferences in what sounds entirely familiar. Link
Has anyone had much luck getting cash back on a top up to an existing mortgage?
I'm trying to negotiate with Westpac at the moment but I've been given a specialist who only responds through email and doesn't answer direct queries on rates, bit frustrating to be honest.
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