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ASB has increased its key 2 year fixed mortgage rate by +0.20% while cutting longer term rates

Posted in News

ASB has flattened its home loan rate offers.

It has raised its key two year fixed rate to 5.45%, increasing it by 20 bps from 5.25%.

At the same time it has lowered three longer term rates.

ASB's three year fixed rate has been cut to 5.75% from 5.90%, a fall of 15 bps.

Its four year fixed rate has fallen the same amount to 5.95%, from 6.10%.

Its five year fixed rate is now 6.25%, a cut of 25 bps from 6.50%.

Its floating, 6 month, 1 year, and 18 month rates are all unchanged.

Companion brands BankDirect and Sovereign have made identical changes.

This is the flattest the mortgage rate curve has been sine March 2009. (A rate curve is flat when there is no difference between rates for short or long terms.)

Wholesale swap rates have been trending up since November, and bank economists have been recommending that now is a good time to shift to a fixed rate. Observers have also noted that the new Reserve Bank governor Graeme Wheeler is a monetary policy 'hawk' and there are expectations that the next OCR move, which however is not expected to come until later in 2013 at the earliest, will be 'up'.

Todays changes position ASB against its main rivals like this:

  2 years 3 years 5 years
       
ANZ 5.39% 5.90% 6.60%
ASB 5.45% 5.75% 6.25%
BNZ 5.65% 5.90% 6.50%
Kiwibank 5.25% 5.65% 5.99%
Westpac 5.40% 5.90% 6.60%

The equivalent mortgage rates for other banks are as follows:

  2 years 3 years 5 years
       
Co-operative Bank 5.35% 5.75%  
Heartland Bank 6.50% 7.10% 7.80%
HSBC Premier 5.39% 5.74% 6.65%
SBS / HBS 5.30% 5.65% 5.99%
TSB Bank 5.30% 5.90% 6.50%

 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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5 Comments

May as well stay floating

May as well stay floating atm.    The 4.95 tempters on 6/12 months have gone for the time being.  Wait for the next competitive round.
 

Banks have told marketing

Banks have told marketing staff that they're sick of customers messing around on floating & short-term fixed.  They want them 'locked-in" on 3 years or more,   so the corporate strategy teams are manipulating longer term rates down(ish) and shorter term rates up a little.
Also, just a little fear-mongering of rates will rise, & the story Wheeler is a 'hawk'.
This achieves 1. Customer lock-in. 2. Potential for revenue bosting through break-fees
3. Stops all these customers continually asking for discounts - get them out of our hair.
 
 

Good morning, where have you

Good morning, where have you got this information from?

Just a likely scenario ... 

Just a likely scenario ...  look at it from their perspective...

Oh ok - the comment read as

Oh ok - the comment read as if you had some information.