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Kiwibank reduces 4 and 5 year fixed mortgage rates
Kiwibank has reduced its four and five year fixed mortgage rates by 29 bps and 19 bps respectively, effective immediately. This move is the first by another bank to respond to rate reductions by ASB late last week, and these Kiwibank reductions match the ASB rates for these terms. Both banks have opened up about a 0.25% advantage over other banks for longer term rates. ASB's earlier moves down for shorter term fixed mortgage rates matched Kiwibank and the rest of the market. With a growing realisation in moneymarkets that official rates will be lower-for-longer, both here and in Europe / USA, wholesale swaps have been trending lower as are the 90 day bank bills. This is opening up some margin that can be used to compete for mortgage market share.
In data released yesterday by the RBNZ, housing credit growth in January was only 3.3% year-on-year, still at its low point since current RBNZ data began in 1998. Despite low and stable official rates, there is still noticeable jockeying for position in mortgage rates - nine institutions changed rates in the past 15 days. The latest mortgage rates are in comprehensive detail on our mortgage rate page here.
8 Comments
David, You should overlay this
David, You should overlay this with interest rates (which have hardly changed) and the offshore funding costs of banks over the last six months (which have been reducing) and this will show how much the NZ banks are now gouging the New Zealand public in the residential mortgage market.
John. Agreed. The 5 yr
John. Agreed. The 5 yr swap is off by some 50bps since before Xmas.
"..we are facing ..a..global bank
"..we are facing ..a..global bank credit squeeze where the leading banks in the developed world are forced to ... raise capital ...or curtail their lending "“ they will do both "“ and then in the process lift their margins."
Maybe the "NZ' banks have jumped in early?
http://www.businessspectator.com.au/bs.nsf/Article/Basel-capital-raising...
Nicholas A......Read some of the
Nicholas A......Read some of the recent IMF policy ( not ratified) publications of late..
I think Banky Boy has got a whisper on the exchange rate focus shifts... as a matter of forward policy.
Absolultey, Christov. The Malaysians weren't
Absolultey, Christov. The Malaysians weren't so silly after all. Looks like some alternative thoughts re floating exchange rates and open market capital flows being discussed in earnest. Best we all borrow 'it' whilst we can....
Big 4 banks combined made
Big 4 banks combined made some $700mil profit last year, and paid out in dividends $2.1 billion. They look after their shareholders, that's for sure. No recession for them.
Bernard, Given where 3+ year
Bernard,
Given where 3+ year swaps rates are today (about the same as June last year), why are retail rates still so high? 3 year should be about 6.75%, 5 year 7.5% in comparison to last year. What extra costs are there that they didn't have mid last year. Are they just paying too much for their term deposits?
Let's see some investigation Bernard.
@ Chris_J: This may be
@ Chris_J: This may be of interest to you. The banks are going to have to raise much more capital than, even now, expected over the medium term. This will progressively push margins out.
"..the quality, consistency, and transparency of the capital base will be raised."
http://www.bis.org/publ/bcbs164.htm