In a surprising move (for us), Westpac has launched a 4.99% fixed home loan rate, the first time a fixed rate has dipped below 5% since late October 2022. Westpac last had a sub 5% fixed rate in September 2022.
That involves a -60 bps drop for that term.
They have also trimmed other fixed rates by either -5 bps or -10 bps for terms 1 year to 4 years.
At the same time, Westpac has trimmed most popular term deposit rates, but mostly by only -5 bps.
So the -60 bps cut really stands out.
Borrowers have not been attracted to fixing this long recently. But a 4.99% rate may get some thinking. It certainly deserves attention, and some renewed consideration.
We reviewed the current state of the mortgage market earlier today and you can find that here. Our 'gentle slide' analogy didn't age well.
The reader-reported mortgage rates are fluid but may be less frequent now, so please record them if you have them. We need you to record them in the comment section below, which helps us stay on top of this fast-changing corner of the home loan rates market.
And still negotiate. How flexible they may be will depend on the strength of your financials.
One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below.
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, like now.
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 February 5, 2025 | % | % | % | % | % | % | % |
| ANZ | 5.99 | 5.57 | 5.39 | 5.44 | 5.59 | 6.19 | 6.19 |
| current reader-reported rates | |||||||
 |
5.99 | 5.54 | 5.34 | 5.29 | 5.59 | 5.79 | 5.79 |
| current reader-reported rates | |||||||
 |
5.99 | 5.55 | 5.39 | 5.29 | 5.59 | 5.69 | 5.79 |
| current reader-reported rates | |||||||
 |
5.99 | 5.55 | 5.29 -0.16 |
5.59 -0.10 |
5.79 | 5.89 | |
| current reader-reported rates | |||||||
 |
5.99 | 5.54 -0.05 |
5.34 -0.05 |
5.29 -0.10 |
4.99 -0.60 |
5.49 -0.10 |
5.59 |
| current reader-reported rates | |||||||
| Bank of China | 5.95 | 5.55 | 5.35 | 5.39 | 5.49 | 5.49 | 5.49 |
| China Construction Bank | 5.99 | 5.57 | 5.39 | 5.44 | 5.59 | 6.40 | 6.40 |
| Co-operative Bank (*=FHB only) | 5.99 | 5.49* | 5.49 | 5.49 | 5.69 | 5.79 | 5.79 |
| Heartland Bank | 5.49 | 5.39 | 5.39 | 5.45 | |||
| ICBC | 5.99 | 5.55 | 5.39 | 5.59 | 5.59 | 5.59 | 5.59 |
 |
6.09 | 5.79 | 5.49 | 5.49 | 5.59 | 5.79 | 5.79 |
 |
5.99 | 5.59 | 5.59 | 5.45 | 5.59 | 5.79 | 5.89 |
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62 Comments
Quite the stunt by Westpac clearly intended to generate headlines. I still don't think this will spark a fire from the cold, dead ashes of the NZ housing market. It isn't going to entice the young, motivated and skilled that are leaving for Australia to remain chained to an overpriced shitbox in New Zealand. None of my renting colleagues (all of whom have a household income of 300k+) are remotely interested in taking the plunge on a NZ house.
To reanimate to Crashing Nz housing markets rotting corpse...... we must have mortgage rates in the low 3.s
Above this and the crash roll into 2027.
Buyers beware, to become the bankster useful buying idiot today and it's likely to be negative equity, soon after.
Just ask the burnt Spruikers lurking here.....
I saw:
by safeashouses | 1st Sep 23, 9:33am
@averageman. You going to hold of a bit longer buying your house? If so I am interested in knowing why? I am actively following your economic outlook to ensure I also buy in the dip.
And good that I didn't listen.
As per usual, plenty of wrong calls from commentators here. TA said just last week
'If I were borrowing at the moment, I would be hoping for a spike of competition between NZ banks to produce a three year rate close to 5%. While waiting for that I’d probably fix just six months'
And still negotiate. How flexible they may be will depend on the strength of your financials.
Not sure this statement is accurate, or am i reading it inxorrectly... I think banks care more about the size of the loan and how long a term you've got left , don't they? They want you on the hook.
by Yvil | 5th Feb 25, 2:25pm
Bank retail interest rates will continue to drop, not because of the upcoming OCR cut, but because of the bank's need to write mortgages. Depositors will pay the price with lower deposit interest rates.
Written before the Westpac announcement.
Yes. Quite astute.
Though I wondered when you wrote it - why do the banks have to keep writing mortgages? Is this just to keep getting new entrants in to replace those getting out (which is very ponzi-like, though I tend to think of the housing market more akin to a pyramid scheme myself)?
Is this just to keep getting new entrants in to replace those getting out (which is very ponzi-like, though I tend to think of the housing market more akin to a pyramid scheme myself)?
It's just cash flow for the banks (sort of).
You need to replace workers from a company when they leave? (circumstantially), does that make a business a ponzi?
Oh. I thought the interest payments were the banks cashflow. Silly me.
A ponzi uses new depositors to pay dividends to/cash out already participating clients.
Seems very similar to what the banks do (with the added benefit of security) for houses - except the banks leverage up the deposit, which allows enough liquidity for the earlier member to cash out on transaction.
So - what happens when there are no new members to leverage from?
"I thought the interest payments were the banks cashflow"
They certainly are Chaos, but with every month that goes by, more principal and less interest is being paid, and some mortgages get repaid in full. Hence banks need to continuously write new mortgages...
BTW, I wrote my post at 2:25pm.
I have $124k left which rolled of fixed on 31 Jan and currently sitting on floating 7.25 while I wait to see what's going to happen.
I want rid of that in 5 years. The monthly payments are
4.99% - $2,339, 4.29% - $2,357, 7.25% - $2,470
The difference from one end to the other is less than a daily cup of coffee.
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