Less than 24 hours after the RBNZ dovish monetary policy review, Westpac has trimmed some fixed home loan and term deposit rates, with the changes effective Friday, July 12, 2024.
And they are unlikely to be the only one.
Westpac last trimmed rates at the end of June, but those just took them down to where their rivals already were.
This time, they are leading short rates lower.
They have cut -19 bps from their fixed six month home loan rate, taking it to 7.05% and about -20 bps lower than their main rivals. In fact that is close to a low for any bank.
Their cut to the one year fixed rate is a full -25 bps, now down to 6.89% and lower than Kiwibank by -10 bps, and lower than their Aussie-owned rivals by -25 bps. This new one year rate is the lowest from any bank, now matching Heartland Bank.
Their 18 month fixed rate goes down to 6.79%, -10 bps below their main rivals.
The carded rates we report here can be different to the rates banks might offer in their banking app. We would like readers to reveal what their banking app shows as the potential offer rates. Please add that market intelligence in the comment section below.
A quick check of the wholesale swap rate chart below gives a clear understanding of where funding costs are heading.
Westpac has also decreased a range of term deposit rates for savers by between -5 and -10 bps.
They have cut their six, nine, twelve and eighteen month term deposit offer by -10 bps and their 8 month offer by -5 bps to 6.0%. These changes position Westpac below their main rivals for these terms. The most dramatic difference is for a six month term deposit where Westpac is now at 5.80% but BNZ is still at 6.15% and will be until the end of the day on Wednesday, July 17, 2024. That is a 35 bps difference.
Even though the RBNZ has not actually cut official rates yet, the market is doing that "for them". Words and signals matter in financial markets.
In a falling market, the squeeze will go on challenger banks. Westpac's move has eliminated much of the rate advantages they thought they had.
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. Break fees will be minimal in a rising market. But they 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 July 12, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.25 | 7.14 | 6.89 | 6.79 | 6.65 | 7.34 | 7.34 |
 |
7.24 | 7.14 | 6.89 | 6.75 | 6.39 | 6.39 | 6.39 |
 |
7.24 | 7.14 | 6.89 | 6.79 | 6.65 | 6.55 | 6.55 |
 |
7.25 | 6.99 | 6.79 | 6.65 | 6.55 | 6.55 | |
 |
7.05 -0.19 |
6.89 -0.25 |
6.79 -0.10 |
6.75 | 6.39 | 6.39 | 6.39 |
| Bank of China | 7.09 | 6.99 | 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 | 7.24 | 6.99 | 6.89 | 6.79 | 6.65 | 6.55 | 6.55 |
| Heartland Bank | 6.89 | 6.69 | 6.55 | 6.35 | |||
| ICBC | 7.19 | 7.05 | 6.79 | 6.75 | 6.59 | 6.49 | 6.49 |
 |
7.35 | 7.14 | 6.89 | 6.49 | 6.35 | 6.19 | 6.19 |
 |
7.39 | 7.14 | 7.19 | 6.75 | 6.65 | 6.59 | 6.59 |
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100 Comments
Kiwis are increasingly insecure about their jobs; businesses are bleeding money and skilled workers are still leaving in droves.
The only thing successive rate cuts will achieve at this stage is stop our housing market from crashing at best. Prices flatlining until there is an actual economy for workers and businesses to be excited about.
Hi Piggy,
Not sure I could stand another round of DGM tantrums about house price rises......
I'd be happy for interest rates to remain at their present levels into 2025. I find all the recent talk of an OCR cut in November this year lamentable - akin to idle chatter.
TTP
What was the 1-year fixed rate 4 years ago in July 2021? 2.15%, when every economist and their dog suggested that it would go lower from there and not to touch the 5 years fixed, at ~3%, with a bargepole. (NB: From memory, the BNZ 7 years fixed was 4.99%.)
Where was the 1-year fixed just a year later in July 2022? 5.15% and headed north. That earlier 5 years fixed was looked back at in fond reflection with words along the lines of "If only...". And in all likelihood today's 5 years fixed at 6.5% will trigger the same response in the future, because the same thinking is still in vogue = "Rates have to go down from here!" Will that be in a years time? I guess we'll have to wait and see. But Risk is swirling around the Globe, everywhere.
(PS: What was my thinking in 2021? (even jotted down on this site) "Borrow every cent you can" not primarily because of the interest rate, but because banking-being-banking you have to get it (and keep it) whilst they are trying to shovel it out the door. The same applies today.)
My friend called today to say they’re selling their dream home. Purchased in Nov 2021 at the peak of the market and with the frustration of Auckland lockdowns, the pull to the country to raise a family was emotionally charged. 2 1/2 years later, they’ve sold all the toys, waited hopefully for a lowering of interest rates but are now facing the facts that they dramatically over extended and can’t service a mortgage at 5% let alone 6. Something percent :(
Oh yes the Rockstar economy propelled by moocows, housing and tourists. None of which are rocking or starring. Buy now while few others cant afford to and are too nervous. There are lots of stories from their friends who bought in 21, 22 and 23 and have been strangled by interest rates
I said it ‘could’ be a good time to buy. If developers get desperate, and get in to simply offloading homes to cover costs.
An example might be a two bed townhouse that the developer might have been wanting 750k for to make a reasonable profit, but which they might accept 625k for if they get in trouble
ie. ‘Distressed developer sales’
ANZ App Today, don't think it's moved yet.
6 Months 6.99%
1 Year 6.85%
18 Months 6.65%
2 Years 6.69%
3 Years 6.65%
4 Years 6.39%
5 Years 6.39%
Have a few loans coming off at the start of August and I'm now wondering if I float them till xmas and try smash principal for a few months.
Does anyone have a calculation for working out how much I would have to up my repayments to offset the increase in interest of being on floating?
WE HAVE CRASHED ALREADY AND ITS NOT DONE.
THE LARGEST CITIES ARE DOWN 40 TO 50%, IN REAL TERMS.
SEEMS SOME MUPPETS DO NOT UNDERSTAND INFLATION ADJUSTED, REAL RETURNS......
Yes a whiff of rates hopium, gets the spruikers out, dragging hard on their hope smoking pipes.
The mound of pain is still to be crested.
Wiley E Coyote, is still to hit the rocks. Keep hardhats on, it's not time to take spruikeresk risks.
Probably will keep dropping for a while yet, probably will start going up again in a years time if rates do get cut, probably (hopefully) won’t see crazy spikes again in our lifetime…but why is it that you jokers only ever use the “but you need to divide it by the amount of jellybeans in the jar & then subtract the miles between two petrol stations” to get REAL loses when discussing property but not when discussing any other investment?
You’re definitely right, one joker was on here saying you need to calculate in the dip in the currency as well, again probably right…I just find it fascinating it’s only used when discussing property though eh 🤔😂
Yes fair call, all investments need to beat inflation or you are a fool holding NET depreciating assets.
The much maligned Gold even (detested by the King of the Riverhead Swamp) has had truly great returns, during the biggest inflation run we have had in decades.
Diversify investments is my best advice.
Sadly, most Kiwis just bet it all and big on property, many have now lost everything over it, in the last 5 years.
These mistakes made, at a mid or older age, are financially devastating. Tales of woe, will abound in the media, over coming months/years.
Prices still up from the end of 2020 if you bought a house then. Houses are not down in real terms when you have to find an extra $100K now to buy my place. The real terms thing is total BS, lets just stick to how much actual cash you need to front to buy a house relative to income.
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