Two more banks cut carded home loan fixed rates for Friday, August 9. They are just the latest and are unlikely to be the last. It is tough keeping up with all the changes!
Westpac's latest reductions essentially match their main rivals who all made earlier cuts - except for their two year fixed offer at 6.19%, which undercuts all the other big banks by as much as 15 basis points (bps). Now most big banks also offer 5.99% for terms three year to five years.
Westpac also made term deposit rate reductions, some as large as 30 bps.
At the same time SBS Bank has cut its carded home loan offers. They too have settled on 5.99% for the same term range, but also now offer it for a two year fixed term. And that is a 20 bps advantage over the 'low' Westpac offer for that term.
SBS Bank has also changed its deposit requirement for residential investor loans, raising it to 30%.
SBS Bank did not change its term deposit rate offers at this time.
In the background Thursday, two market events mean that there may be more downside for interest rates generally.
Both global and local wholesale rates and benchmark bond rates are still falling.
And local inflation expectations are quickly reducing towards the RBNZ 2% target.
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 loan-to-value ratio (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.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at August 9, 2024 | % | % | % | % | % | % | % |
| ANZ | 6.99 | 6.85 | 6.49 | 6.34 | 5.99 | 6.84 | 6.84 |
 |
6.99 | 6.85 | 6.49 | 6.25 | 5.99 | 5.99 | 5.99 |
 |
6.99 | 6.85 | 6.49 | 6.34 | 5.99 | 5.99 | 5.99 |
 |
6.99 | 6.75 | 6.34 | 6.09 | 6.09 | 6.09 | |
 |
6.99 -0.06 |
6.85 | 6.49 -0.16 |
6.19 -0.30 |
5.99 -0.30 |
5.99 -0.20 |
5.99 |
| Bank of China | 6.95 | 6.79 | 6.59 | 6.09 | 6.09 | 6.09 | 6.09 |
| 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 | 7.05 | 6.85 | 6.65 | 6.49 | 6.39 | 6.29 | 6.29 |
 |
6.99 -0.06 |
6.85 -0.04 |
6.49 -0.20 |
5.99 -0.50 |
5.99 -0.36 |
5.99 -0.20 |
5.99 -0.20 |
 |
6.99 | 6.85 | 6.89 | 6.49 | 6.39 | 6.39 | 6.39 |
Fixed mortgage rates
Select chart tabs
Daily swap rates
Select chart tabs
Comprehensive Mortgage Calculator
31 Comments
Why do you care what the rate is, surely time in the market etc, it just all averages out?
If you cannot pick house price tops/bottoms, why do you think you can pick interest rate cycles?
Maybe the savvy will buy at the bottom and fix for 5 years as well , in 18-24 months time
Good luck predicting the future. Look at the inflation expectations article from yesterday. This is based on professional forecasters but they just predict forward what they are seeing now - a form of recency bias. None of them predicted the spike in interest rates until it happened.
In 5 years, the OCR could be 0% or 10%. You are chasing an efficiency that is only visible in hindsight.
More importantly right now is what you can afford to pay. If you know you can afford higher rates then take a punt on short-term rates. If you are already or close to struggling, lock in some certainty for your mental health.
Yes. The current economic state, mortgage issues and unemployment numbers were predicted and expected by RBNZ when rates were raised. It was the whole point.
They also knew certain entities (banks, REAs, speculators, leveraged businesses etc) would whinge and lobby like mad as their business models and excessive risk taking came under extits reme pressure.
So now RBNZ needs simply to hold their nerve, do nothing and sit and watch as those entities experience pain of their own making and are forced to adapt (banks/REAs) or close (leveraged investors or developers). Banks have to find their own way out of the messy parts of their books.. REAs have to work out how to sell properties in a downturn... developers have to work out how to build and sell house now..
Keeping rates HFL is actually far and away in the best interest of the majority of nz peeps.. in the medium to long term.
I am hopeful at some point it will force local govt to start to control costs as their mayor's are elected on promises to manage costs and reduce rates too. Currently their wastage is hurting everyone.
And these are carded rates, meaning it'll be a lot less on negotiation. It's crazy seeing how quickly it's all falling, clearly there's insufficient new mortgage lending results in heavy and swift cuts / price war.
The RBNZ doesn't need to cut at this point - the banks are doing it for them.
Low 5's will defiantly see a significant uptick over a 12 month period. You only need to look at long term average rates and long term average house price gains to see that.
Not necessarily Z. Yes, you can build rudimentary models based on past consumer behavior to try to understand what will happen if you make a change in a single variable like cost of credit, but it's foolish to think that central and commercial banks are masters of the universe and control people's behavior and markets like a puppet on a string. If it were all about simply changing the cost of credit, Japan would never have 30 years of deflation, despite the BOJ's / MOF's combined efforts.
Lets come back here for Christmas next year if the mortgage rates get to 5.5% for the 1 to 2 year and take a look at the house price gains.
And what if prices don't gain? Would it mean your elementary analysis is wrong? Known unknowns or unknowns unknowns?
You never would have learnt about falsifiability when you were at school. Probably because it wasn't taught.
If you had worked with any robust modelling or analysis in your life, you should be familiar with the idea.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.