The autumn real estate market is winding down. Transaction levels, already low, are slipping, and after the 'long' ANZAC weekend, this season will be all over, and we will be into the winter season.
But making one final - and effective - splash is SBS Bank.
They have sharply cut their 2, 3 4, and 5 year fixed rates.
And one of those cuts will certainly grab attention.
Their new offer is 5.99% fixed for three years.
It is effective from Saturday, April 20, 2024.
This is far and away the lowest rate for any fixed term currently in the home loan market. And it is -66 basis points lower than any main bank's carded offer. It is also -20 bps lower than the Heartland Bank three year rate, which was the prior market-leading level for that term.
SBS's moves comes as wholesale interest rates are generally rising, mainly on global factors, but also because local inflation isn't retreating as the Reserve Bank wants and financial markets are busy removing their pricing for 2024 Official Cash Rate cuts.
SBS has also taken its carded 4 and 5 year rates down to 6.19%, and both of those have now become market leading levels.
The last time we had any home loan rate sub-6% was from Heartland Bank, and their 3 year rate of 5.95% that ended on July 27, 2023.
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.
However in this case, it seems doubtful SBS Bank would discount from these hot new low rates. And it may be hard for frontline mortgage managers at rival banks to match them with the current discretion that have.
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 April 20, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.35 | 7.24 | 6.89 | 6.79 | 6.65 | 7.34 | 7.34 |
 |
7.29 | 7.24 | 6.89 | 6.75 | 6.65 | 6.55 | 6.39 |
 |
7.29 | 7.24 | 6.89 | 6.79 | 6.65 | 6.55 | 6.55 |
 |
7.35 | 7.25 | 6.79 | 6.65 | 6.55 | 6.55 | |
 |
7.39 | 7.29 | 6.95 | 6.75 | 6.65 | 6.59 | 6.39 |
| Bank of China | 7.09 | 6.75 | 6.65 | 6.49 | 6.39 | 6.39 | |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.29 | 7.24 | 6.99 | 6.79 | 6.65 | 6.55 | 6.55 |
| 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 |
 |
7.35 | 7.24 | 6.99 | 6.69 -0.16 |
5.99 -0.66 |
6.19 -0.36 |
6.19 -0.36 |
 |
7.39 | 7.24 | 7.19 | 6.75 | 6.65 | 6.59 | 6.59 |
Fixed mortgage rates
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18 Comments
That was my point. They are indeed a 'bank'. But they are a non-for-profit bank. Much like building societies are.
"Our purpose is Helping Kiwis find a place to call home. As a member-owned New Zealand bank, we’re very much in the heart of our communities."
Source: https://www.sbsbank.co.nz/about-us
Funny how both mortgages and TDs are going short. If people really thought interest rates are heading down wouldn’t people sign up for 5 year TDs?
My guess is that this is a good deal, that mortgage rates may not get lower than this within 3 years, and even if they did it will take a while meanwhile you are paying a much lower rate so end up much better off.
Like Heartland, SBS has probably got lots of 'conditions' to this offer. I.e. They are looking to add 'quality' to their lending book. (i.e. low LVRs, good DTIs, etc. etc.)
Good move. There will be people who are sick of the for-profit tactics of the big banks and will be happy with what's on offer from a not-for-profit banks. We need this.
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