Just two weeks after it started the latest round of retail rate cuts, Westpac has cut its carded rates again.
But this time, instead of leading the market, they are adjusting to the lower rates their rivals implemented after Westpac's first move.
Notably, they have not cut their six month fixed rate. It remains at 7.05% with them choosing not to chase ASB's low 6.99% carded offer for that popular term.
But they have adopted ASB's new low 5.99% rate for a fixed five year term.
In between, Westpac's 12, 18 and 24 month offers now match their rivals.
But they have gone lower for 3 and 4 years fixed. Their new three year rate is -15 bps lower than any of their main rivals and at 6.29% is actually only bested by the Heartland Bank rate for that term.
And going one step further their new four year fixed rate is now the market low at 6.19%, matching SBS Bank which was already at that level.
Westpac has also cut its term deposit rates by between -10 bps and -30 bps. That means Westpac no longer has any 6% rate offers for savers.
In its release, Westpac said; "We continue to see fairly low numbers of customers struggling with cost of living challenges, but we know many families are doing it tough." Obviously this comment was aimed at borrowers.
Almost all banks will have some flexibility in their rate offers. So the carded rates are just the start. Negotiate. How flexible they may be will depend on the strength of your financials. And don't forget, banks have savvy tools at hand to 'know' the likely valuation of your property, so if the LVR is near 80% you may not find them very accommodating for a lower rate. With falling house prices, the point where low equity premiums start applying is shifting around as well. See this.
And 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.
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.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment. Updated with Kiwibank changes effective Monday.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at July 25, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.05 | 6.85 | 6.69 | 6.49 | 6.35 | 7.14 | 7.14 |
 |
6.99 | 6.85 | 6.69 | 6.49 | 6.35 | 6.29 | 5.99 |
 |
7.05 | 6.85 | 6.65 | 6.49 | 6.39 | 6.39 | 6.39 |
 |
7.05 | 6.85 | 6.49 | 6.39 | 6.39 | 6.39 | |
 |
7.05 | 6.85 -0.04 |
6.65 -0.14 |
6.49 -0.26 |
6.29 -0.10 |
6.19 -0.20 |
5.99 -0.40 |
| Bank of China | 7.05 | 6.85 | 6.75 | 6.49 | 6.29 | 6.29 | 6.29 |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.05 | 6.79 | 6.69 | 6.49 | 6.35 | 6.35 | 6.35 |
| Heartland Bank | 6.69 | 6.49 | 6.35 | 6.15 | |||
| ICBC | 7.19 | 7.05 | 6.79 | 6.69 | 6.59 | 6.49 | 6.49 |
 |
7.24 | 7.14 | 6.89 | 6.49 | 6.35 | 6.19 | 6.19 |
 |
6.99 | 6.85 | 6.89 | 6.49 | 6.39 | 6.39 | 6.39 |
Fixed mortgage rates
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Comprehensive Mortgage Calculator
48 Comments
Indeed, with World share valuations looking more stretched than prior to GFC or the Great Depression and an interest rate inversion to boot, chances are increasing it could well be very much a different kind of "downhill" for everyone soon. However as Rastus alludes above, unlikely moves that will upset markets will happen prior to the US Election.....
By now, it should be obvious my risk tolerance is low.
Stage of life perhaps?
One gets to a point that TD's are a better bet as you need to lock in those retirement funds.
I anticipate a severe 'correction' coming, the problem is where is the 'safe harbour?
Cash? The OBR policy is a concern however perhaps one should console themselves in that it is operational if a bank is placed in statutory management.
Luck and timing would have one balling out of cash and into the discounted shares before the banks fail. Some chance of timing that.
Aside from holding TD's with three major banks, we hold Kiwi Bonds - these are Government guaranteed and unlike Government bonds, their value neither rises nor falls. Our Kiwisavers are somewhat more diversified.
If an OBR situation were to develop, asset prices would be absolutely crashing. We are not concerned about the price of our home. I'd be more concerned for those who owe big money on homes that are tanking in price.
If property prices were half what they are today, you know, what they were just a handful of years back, then the Debt we owed to those pesky Aussie banks would be half, and their profits would be commensurately less. So who are the dummies in this exercise? Not Adrian. He's probably doing the best he can to reign us in, but are we listening? Will we listen? Oh, no....
Why, to all of those points?
From David's wrap this arvo:
" Borrowers made scheduled repayments of $7.3 bln in the quarter, the most since this series started in 2014. Perhaps even more remarkable, borrowers kept up their excess payment levels, making another $4.1 bln over and above. And while this was no record, it is still well above the ten year average of excess payments in a quarter. Repayment deficiencies remain very low and nowhere near a record. Write-offs remain insignificant "
You're right - I recall posting this one a year ago;
by Retired-Poppy | 1st Jul 23, 8:12am: "Increased clearance rates is one thing, increased sales volumes together with rising prices is something else altogether. Then there's the all-important factor - sustainability. Another massive and coordinated Spruiker push coming using fudged figures alongside a low volume dead cat bounce powered along by the naive is the best of it"
Deja-vu? Is there another Dead Cat Bounce coming? Personally, with major job insecurity thrown into the mix - I can't see it happening this year. Another similar Spruiker push on the back of lower rates - absolutely.
These rates are still astronomical.
Too little too late. RBNZ has well and truly stuffed up. The full extent of their miscalculation will only become clear in 6 months or so.
RBNZ should be cutting to the extent that wholesale rates are in the order of 5% fixed for one year.
The bwankers at kiwibank are being so kind, trying to keep 3/4 of the swap rates drop for themselves and have also lowered the discount off the published floating they are offering. Still going to float till the next OCR unless they come to the party with better rates.
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