Just one more sleep until the August Monetary Policy Statement from the Reserve Bank (RBNZ).
Financial markets are pricing in about a two-thirds chance of a 25 basis points (bps) rate cut to the Official Cash Rate (OCR) being announced Wednesday.
We thought most banks would wait until the announcement and see how markets react to the decisions.
But one has jumped already.
TSB has gone low with its carded rate offers for home loans. And its new 6.69% one year fixed rate is the market-leading rate for that term. The only other bank that low for that term is Heartland Bank.
TSB has also adopted the 5.99% level than many main banks have for terms three to five years fixed.
That means that the lowest carded rates are now:
| Fixed for ... | % | from ... |
| 6 months | 6.95 | Bank of China |
| 1 year | 6.69 | TSB, Heartland |
| 18 months | 6.49 | ANZ, ASB, BNZ, Westpac, Coop Bank, Heartland, SBS Bank |
| 2 years | 5.99 | SBS Bank |
| 3 years | 5.99 | ANZ, ASB, BNZ, Westpac Coop Bank, SBS Bank, TSB |
| 4 years | 5.99 | ASB, BNZ, Westpac SBS Bank, TSB |
| 5 years | 5.99 | ASB, BNZ, Westpac SBS Bank, TSB |
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 13, 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 | 6.85 | 6.49 | 6.19 | 5.99 | 5.99 | 5.99 |
| Bank of China | 6.95 | 6.79 | 6.59 | 6.39 | 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 | 6.99 | 6.79 | 6.49 | 6.29 | 5.99 | 6.09 | 6.09 |
| 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 | 6.85 | 6.49 | 5.99 | 5.99 | 5.99 | 5.99 |
 |
6.99 | 6.69 -0.16 |
6.65 -0.24 |
6.25 -0.24 |
5.99 -0.40 |
5.99 -0.40 |
5.99 -0.40 |
Fixed mortgage rates
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Daily swap rates
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Comprehensive Mortgage Calculator
43 Comments
We were told house prices would first stabilize then start rising on the collective belief that interest rates had stopped rising, then again on the anticipation of imminent falls. Now banks have now initiated cuts on the back of weak lending demand - to date house prices are still falling.
Throughout previous downturns employment insecurity was center of stage to. International events beyond our control could easily turn this overdue correction into something else courtesy of a perfect storm.
A lower CPI without the corresponding fall in interest rates makes money more attractive than it would have been with a higher CPI. A 5.5% OCR with a 3% CPI makes for more attractive term deposits than a 5.5% OCR with a 5% CPI. This increase in value of term deposits makes hard assets relatively less attractive so they fall.
Retired Poopy - just shut up mate. I see you commenting on every article here with the same old nonsense.
You don’t actually think the effects of recent cuts will already show in the housing market do you?
What is wrong with you? And before you even start - try control yourself with the personal digs this time.
Must be sweating tear dropped shaped ice bullets.
Outbursts like his are generally (in the context of a financial news website, and in particular an article around interest rates) indicative of someone overleveraged and hemorrhaging cash. The stress is so much that all rational thought goes out the window, rage induced tunnel vision kicks in, and their vulnerability is exposed in the tone of their comment.
Retired Poopy - just shut up mate
Iceman, are you stuck paying interest on an asset that's declining in value? Your volatile behavior of late indicates that you're not coping. Your behavior is telling more of your own financial predicament than mine.
try control yourself with the personal digs this time.
Funny!
I see you commenting on every article
Well that speaks volumes alone. Don't worry about me. Don't get angry, just sigh and move on - easy.
edit.
Come on Iceman, tell me how you really feel. Why do my posts annoy you so much. As creepy as it sounds, you've already admitted to reading my every post.
Anyway, I'm amazed at how many Spruikers are expecting house prices to be immediately impacted by lower rates. It's easy to tell that despite your comments to the contrary, deep down you do too - edit.
you are sweating your about to be 2% TD rates and there’s nothing you can do about it.
Ha-ha funny! you posted the same thing a week or so ago and the rate was 3%! Are they really going down THAT fast?
Anyway, just sigh and move on. I'm really not worth the angst - easy :)
What is the overriding criterion any Lender takes into consideration when making a Loan, whatever the Price (%) is?
Answer: The ability of the borrower to repay the Loan.
And the lower rates go, the more that question is being studied. Because that will mean more and more applicants are failing whatever tests the Lenders are doing, and so they have to keep dropping rates until they get suitable borrowers.
Lower Rates doesn't make it easier to Borrow, it's shows it harder.
My personal opinion is I'd never take a rate from an app. That's the "easy" offering, trying to tempt customers with "simple, convenient" loan rollovers. Put in the hard yards, ask for better (the table above shows a better rate is already available), and don't give up until you see the whites of their jocks. Threaten to leave if you must. Heck, actually leave if you can get better elsewhere.
"the table above shows a better rate is already available" - those rates were from July, since then swap rates have declined massively but you will struggle to get much better out of your bank I reckon.
The app rates do tend to be quite good these days, I think you will struggle to do better without having a better offer from another bank.
Same rates for me for (as of today) $371,669.75 of lending. Currently on 6mths rolling off on 3 Sept 2024.
We got $1500 cash back ~6mths ago, wondering if we can get another cash back even though we have to stay with ANZ for another 2.5 years or else have to pay the $1500 back?
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