ASB has made one of the year's largest home loan rate reductions, cutting its three year fixed rate by -40 basis points.
The new rate is 4.39% as a 'special'. (It also cut its standard rate by the same amount, with that new rate as 4.79%.)
The result is the market leading position for that term - and even beating the equivalent HSBC Premier rate of 4.69%.
All its rivals have a best-rate for three years of 4.85%, so ASB now has a 46 bps advantage.
Perhaps as importantly, this new competitive three year rate is also competitive with most two year fixed rates. In fact, ASB itself is still offering 4.49% for two years as its 'special'.
Not only is the Spring real estate selling season just getting underway, but wholesale swap rates have been trending lower at the same time which opens up the opportunity for moves like this. Today, the two year swap rate is just 2.06%. At the end of June, this rate was 2.35% so that makes the parallel wholesale rate drop was -29 bps.
There are other sharp rates, including a range of offers at 4.19% from a few banks for fixed terms of one and two years. And there is still HSBC Premier's 3.99% one year and 18 month fixed rate 'specials'.
ASB has also cut its five year fixed rate by -40 bps to 5.09% for its 'special' version. But Westpac has a 4.99% five year 'special' in the market.
And it has cut some term deposit rates as well. See here.
See all banks' carded, or advertised, home loan interest rates here.
Here is the full snapshot of the fixed-term rates on offer from the key retail banks.
below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
as at August 31, 2018 | % | % | % | % | % | % | % |
4.99 | 4.29 | 5.15 | 4.49 | 4.85 | 5.85 | 5.99 | |
4.95 | 4.29 | 4.39 | 4.49 | 4.39
|
4.95 | 5.09
|
|
5.35 | 4.29 | 5.05 | 4.49 | 4.85 | 5.89 | 6.09 | |
4.99 | 4.19 | 4.39 | 4.85 | 5.19 | 5.39 | ||
5.25 | 4.29 | 5.15 | 4.49 | 4.85 | 5.89 | 4.99 | |
4.80 | 4.24 | 4.45 | 4.49 | 4.85 | 5.39 | 5.59 | |
4.85 | 3.99 | 3.99 | 4.19 | 4.69 | 4.99 | 5.29 | |
4.99 | 4.19 | 4.49 | 4.49 | 4.85 | 5.39 | 5.55 | |
4.85 | 4.24 | 4.29 | 4.29 | 4.85 | 5.55 | 5.69 |
In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.
And TSB still has a 10-year fixed rate of 6.20%.
26 Comments
A nephew of mine in the US got a rate like that some years ago if I recall correctly. Hasn't seemed to have made a lot of difference as he still bought an iPhone on time as well - tried to sell it to my son who moved over there recently, explaining that he'd already hire purchased the latest model before having paid that old one off :-).
The world is a mad place.
Houseworks, ASB are hardly com-com fodder! They currently offer domestic depositors 3.45-3.65% for 1-3 year terms for $10K and above. Not unlike the other major banks, I understand ASB source over 70% of their funds this way (happy to stand corrected). How can you justify they are ripping the consumer by charging 4.39%?
Is it because you're currently paying over 5% on your negative geared rental? Sour grapes perhaps? Be patient. Rates are going lower yet and you will get your turn too :)
Do you mean the single residential Hamilton flat that is heavily geared and we are struggling to keep up with the mortgage payments and the rental expenses??? No!! Hahaha
How's your single property with the deferred maintenance that you have to live in because you failed to make any wise property investments?
BTW I agree the banks use funding from depositors, I don't think this has changed since a decade ago when the banks margins were much lower. The aussie banks nz operations are the most profitable segment of their businesses.
Yes we have some floating rate mortgage money to manage our cashflow and lump sum payments. See you at the Home Show rp, what funny costume are you wearing?
Well FHBs; housing affordability has just got (albeit only very) slightly better.
Given that the market has been relatively flat over winter indicating that a collapse is unlikely to be imminent, and all the indicators (e.g. auction clearance rates and increasing listings) show that the market is definitely a buyers market with the opportunity to bargain hard; is it time to sharpen the pencils, do some calculations, and be prepared to negotiate hard?
The assurance of a three year period also gives at least some time to start paying down debt as protection against future mortgage rate increases and also alongside a likelihood of increasing wages.
Yes, it will be tough and sacrifices will be needed; but then buying a first house has always needed a commitment and has been tough.
Oh, and if you need to put your purchase off another year, given the flat market, house prices won't be drifting further out of your reach day by day as they have done for much of the past decade.
Yep. Buyers market remains, with FOMO being replaced by JOMO (joy of missing out).
Still legacy high prices from cheap overseas cash, but interest rates in decline protecting existing debt positions and prices. Wage inflation underway via Govt sector lolly scramble and already being felt aggressively in the construction sector with several financial drownings visible, and several more heavily rumored.
Govt driving change for investors in the form of exiting overseas pricing impact, minimum equity requirements, loss fencing, minimum healthy living standards, RTA changes, Kiwibuild focus, and Capital gains tax on the radar.
Key issue really is the crazy levels of debt everywhere you turn. The only real winners are the Banks I guess
Ex Expat, have you considered voluntary work? It could help suppress those feelings of being disenfranchised. By doing this you'll make a worthwhile contribution to society. Personally, I volunteer my services at least one day per week and have done so since bidding farewell to paid work.
Ex Expat, as you know, charitable organisations are as plentiful as the vacancies; https://volunteeringauckland.org.nz/individuals/opportunities
Growth requires the issuance of new debt, if you won't borrow at %4.8 let's try %4.5 or %4.0 or even %3.0. They need to Find the magic number.
https://youtu.be/_RWXrQqENvg
I wonder if this is a sign that the banks are expecting/experiencing a reduction in the rate of lending to households, (we know gross lending turned negative last month).. So now we have lower mortgage rates competing to win as much of the re-mortgage market as possible? That's pretty much what happened in the UK 10 years ago, it's like watching a repeat of an old classic!.
These historically low interest rates are great news for home buyers (and home owners).........
But very bad news indeed for bank depositors, who we ought to have empathy for - especially for those who are elderly/retired. It's no fun for them.
Banks are signalling that interest rates are going to remain low for a good while yet.
TTP
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