TSB Bank has cut three, four and five-year fixed-term home loan rates by 15, 10 and 35 basis points, respectively.
TSB says it has cut its three-year rate to 6.10% from 6.25%, its four-year rate to 6.50% from 6.60% and its five-year rate to 6.90% from 7.25%. The changes are effective immediately.
The cuts bring TSB in line with rates being advertised by most other banks, although the-Cooperative Bank, formerly PSIS, continues to have the lowest advertised four-year bank rate at 6.45%. See all bank advertised home loan rates here.
The TSB cuts come with swap rates having fallen overnight, with the three year rate down 6 basis points to 3.32%, four-year down 6 basis points to 3.55% and five-year down 7 basis points to 3.76%. The Reserve Bank is due to review the Official Cash Rate, currently at a record low of 2.5%, tomorrow.
Westpac chief economist Dominick Stephens last week suggested it was time for floating rate mortgage borrowers to fix before interest rates went up. And Roger J Kerr, Asia-Pacific Risk Management director, this week also said borrowers would be well advised to fix.
At the end of January 61.7%, or NZ$105.687 billion of the total NZ$171.267 billion worth of home loans were on floating, or variable, rates, according to Reserve Bank figures. That's the highest proportion floating since the central bank's records began in June 1998.
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3 Comments
So if longer term swap rates are falling and banks are reacting accordingly should we not be stting tight for just a while longer to see if they will fall further? I think the banks have noticed that not many of us floaters are keen to jump just yet - that's what all the fix now hype is about!! I'm by nature not a gambler but I am quite willing to place a punt on a bigger carrot in the not to distant future. Forget the short and medium term rates - I think the banks will be tweaking the 3-5 year rates a fair bit more - that's where I see a rates war heading between the banks. Or maybe I'm just being naive!
I agree....just before any hikes, long term are very likely to become a bit of a customer war between banks, then locking them into the long term rates that will not see the hike period out...which will then mean is say 2 or 3 yrs later they refinance at a hefty rate.
So it maybe prudent not to take the lower shorter terms but the longer 4 or 5yr that will not be currently as attactive.
Its all Bank propaganda, sry marketing.
Cheers
Steps
Steptoe that is true, to lock into a period any less than 3yrs in the current environment is asking for certain trouble, as the cycle will likely only have just peaked at 3 years from now. Call me a coward but anything longer than 3yrs is real crystal ball stuff to me and scares the crap out of me!! 2 yrs has always been the max for me (until now!)
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