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ASB cuts rates for one and three year <80% LVR mortgages, matching rivals with market leading lows

Posted in News Updated

(Updated with ANZ rate move.)

ASB has cut its 'special' one year mortgage rate again, reducing it to 4.95% late today.

The previous rate was 5.15% so this is another 20 bps cut, matching main rivals BNZ and Westpac for the one year rate.

ASB last cut this rate on October 4, 2013.

Also today, they cut their three year fixed rate to 5.99% also matching BNZ, Westpac and also SBS.

This caps a month where ASB also cut its 2 year rate to 5.59% on November 8, 2013.

Despite general expert commentary that rates are due to head up next year, we are seeing the <80% LVR get very competitive and rates are falling in this segment.

The depth of the competition is emphasised by the shift by the big operators into the 'low rate' positions.

We are seeing few moves in the first home buyer segment of >80% LVRs.

BankDirect has made the same moves. Sovereign haven't yet announced their changes but it is expected they will follow quickly.

Both ASB and BankDirect specials are available for all existing home lending (irrespective of LVR) and new home lending which has a minimum of 20% equity in the security property i.e. an LVR of 80% or less. These special rates are subject to customers having (or obtaining):

- an ASB/Bank Direct Credit Card and

- their main transactions account with ASB/ Bank Direct i.e. their salary, wages, business or rental income credited to this account.  

Update: ANZ has also introduced a 'special one year rate of 4.95% for borrowers with a minimum of 20% equity.

To qualify for this new ANZ rate - like most others - you need to have your salary credited to an ANZ account, plus you will need to have either an ANZ credit card or an ANZ insurance policy. If you have an existing ANZ package discount, that won't apply to this 'special' rate. Can't meet these requirements? then the 5.19% rate will apply even if you have 20% equity.

See all carded, or advertised, bank home loan rates here.

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 5 yrs
 (updated) 4.95% 5.59% 5.95% 6.50% 7.10%
ASB 4.95% 5.65% 5.59% 5.99% 6.99%
BNZ 4.95% 5.80% 5.95% 5.99% 6.99%
Kiwibank 5.25%   5.65% 6.40% 6.90%
Westpac 4.95% 5.75% 5.59% 5.99% 7.10%
Co-op Bank 4.99%   5.59% 6.20%  
HSBC 5.10%   5.65% 6.35% 6.99%
SBS / HBS 5.20% 5.45% 5.45% 5.99% 6.55%
TSB 5.40% 5.40% 5.85% 6.45% 7.00%


Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »

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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More interest rate cuts. Keep

More interest rate cuts.
Keep them coming.
Banks are discounting their product, thanks to the LVR new rules diminishing their customer pool in NZ.
How about a 4.6% ?  Say, 6 months?  Now that would get the customers changing banks!

Whats their cost of funds do

Whats their cost of funds do you reckon then ?

Mortgagebelt, maybe lower,

Mortgagebelt, maybe lower, reckon they have the margin to do it. Lets see some fair profits instead of the blatant in your face record profits each and every year. Its about time they gave something back to the public in the form of lower interest rates instead of conveyor belt dividends for shareholders

Where do their ROEs sits in

Where do their ROEs sits in the NZ100 ?

Now, now Grant A, don't bring

Now, now Grant A, don't bring logic and reason into this. 

Cyprus, a bankrupt state

Cyprus, a bankrupt state offers residential mortages at 7.25%. Our 5 year rates are a nonsense at 7% supposedly an economy that is doing well? Perhaps we are in the same category as Cyprus? Or our banks are just too greedy and our RBNZ and Commerce Commission hopelessly useless in ensuring we are competitive on the global stage.

I don't really care what

I don't really care what their wholesale cost is -  I am advocating for the MortgageBelt of NZ.
And I am getting a little tired of constant opposition from a certain Grant A, advocating for the Banking Industry.
However, I have deduced:  Grant A may, in fact, be Tony Alexander.    The A = Alexander,  The 'ant' in Grant = 'Anthony' aka Tony.    Only puzzling thing is Tony has a good sense of humour ,,,

Exactly MM.  Make a comment

Exactly MM.  Make a comment against banks and Grant A appears. Every time.
The lack  of humour indicates a robot.  Lives on a server deep in a bank basement in Sydney.

KH - if you'd actually look

KH - if you'd actually look at the stupid comments, mainly from one individual that I respond to, and yes almost solely interest rates & banks, as an ex-banker its hard not to respond to him in an increasing frustrated non-humerous way as no one else seems to which arguably  legitimises his coments.  Won't happen again as I've have decided to withdraw from posting as I agree its contributes nothing. 

If you don't like the service

If you don't like the service that the banks provide, don't use them. 

Do you really think any

Do you really think any econmist of note would bother here MM. Your first sentence in reply answers my question thanks

It depends on your definition

It depends on your definition of 'note' - but it seems there are plenty of wannabes clamouring to get on board.

Chinese made sleep-outs … 10

Chinese made sleep-outs … 10 square metres for $9,999 … then up from there …
Imported $9,999 sleep-outs create a sales rush ... NZ Herald report ...
Doing business in China … a “must view”  superb China Exploration documentary …
China Rises: China or Bust ... China Exploration ... You Tube
Hugh Pavletich

Structural reforms required

Structural reforms required ... Easy money creating massive distortions doesn't work
The Bankers Welfare Programme …
Confessions of a quantitative easer | | MacroBusiness
Confessions of a quantitative easer - The Business - ABC News (Australian Broadcasting Corporation)
Andrew Huszar: Confessions of a Quantitative Easer -
Allowing affordable housing to be built may be a good place to start, so housing is restored to normal 3.0 times annual household incomes incorporating sensible mortgage loads of about 2.5 times … Why be a “mortgage slave” ? …
2013 9th Annual Demographia International Housing Affordability Survey ... Introduction ... New Zealand Deputy Prime Minister Bill English
Why repeat the mistakes of recent history (2007) of California ( and Ireland too )  where million dollar homes were being mortgaged financed by households on $90,000 annual household  incomes… 11.0 times … ?
Straight Talk on the Mortgage Mess from an Insider - Herb Greenberg - MarketWatch
Hugh Pavletich

Having just spent the last

Having just spent the last six months overseas I can honestly say the people of NZ are mental! I used to think BH was joking when he used to rave about how property was half our economy, but now I realise he was serious and RIGHT!
Nowhere else in any of the countries I visited were the people so completely fixated on residential property as Kiwis are. Here's something that will make you laugh - Since I've been back all anyone has asked me about is what are the property investment opportunities like overseas!!!
No Kiwi has ever asked me about anything else! Always it's about house prices and can they invest overseas etc etc etc! I always reckoned it was bad enough when all anyone wanted to discuss was boring rugby shite but now that would almost be a breath of fresh air!!! LOL!!!

I was back last month and

I was back last month and visited an ANZ branch to sort out some account business. The counter clerk said that Barfoot & Thomson (or one of the generic estate agents) was holding a seminar IN THEIR BRANCH in 10 minutes on investing in property and that I should attend.
A B&T drone tried to grab me as I walked out - best way to invest wugggawuggawugga. Told him no thanks, that I was quite happy with my cash reserves and 3 properties - 1 residential, 1 rental in Europe and 1 holiday home in NZ, not interested.
The guy wouldn't let go - gave me the spiel about how I can get guaranteed 20% ROI per annum wuggawuggawugga
Confirms to me that NZ's banks are no better than the drug dealers hanging out on Baltimore street corners, touting

  • Green, red, blue, and black tops
  • Tech 9
  • In the Hole
  • Q tip
  • Payback 
  • Killer Bee
  • Red Dilly
  • Gold stars
  • Family Affair
  • Death Row
  • WMD
  • Bin Laden
  • Rockefeller
  • Double Cheese
  • Spider bags 
  • Bottle Rockets
  • Reddies
  • Rasheed
  • Benno
  • Body Bags
  • Pandemic
  • Black horse
  • Big Yellow Bird
  • Brokeback
  • Icicle
  • Mistletoe
  • Greenhouse gas

Or whatever they're calling the drug of choice that day

John B and Magnum ... it will

John B and Magnum ... it will be the same ones ... including their Banks ... grovelling for Government support / welfare down the track.
Easy come ... easy go.
Hugh Pavletich

Yeah John B and the Kiwi

Yeah John B and the Kiwi property junkies are eating it up! I have never been so BORED as I have been since I came home!
John I want to scream at everyone here that if all you can ever talk about is houses DON'T TALK TO ME!!!

With respect John B and

With respect John B and Magnum PI, why on earth are you here talking about property then?

I do agree with you that kiwis are obsessed with property but so is everyone that migrates here it seems.

and the great majority of

and the great majority of common taters here on are not kiwis 

So.. what are the property

So.. what are the property investment opportunities like overseas!!!
Couldn't resist :-).

In non-Anglosaxon cultures,

In non-Anglosaxon cultures, house prices tend to track inflation....

Magnum PI: No Kiwi has ever

Magnum PI: No Kiwi has ever asked me about anything else
Not being born-and-bred yourself, how would you recognise a kiwi?

I hope you see the irony in

I hope you see the irony in your post. 
If you want to talk about something else how about you get us started.  What do you invest in?

Machiavelli With respect John

Machiavelli With respect John B and Magnum PI, why on earth are you here talking about property then?
I think it's highly relevant that a bank tries to push someone who has indicated zero interest in investing in property towards a seminar that will ultimately (hopes the bank) result in their borrowing money from said bank.
In other trades, that comes under "soliciting". Or "pimping". Or "slinging"
Passport' (Uruwhenua) is issued in Wellington, btw.

John B, agreed. Banks CEO,

John B, agreed. Banks CEO, directors and shareholders are setting terror sales targets that make bank staff act and behave like drug dealers. RBNZ should act to restrict conveyor belt dividend payment policies and impose jail sentences for irresponsible lending and dividend payment practices that cause a banks collapse.

Housing: What are the risks

Housing: What are the risks of high Lending Multiples ?
John B and Zany … It should be pretty clear by now (yawn yawn), following 9 Annual Demographia International Housing Affordability Surveeys ( Houston existing and new home prices)  , that if housing exceeds 3.0 times annual household incomes requiring mortgage loads of about 2.5 times, it clearly illustrates the market is dysfunctional and in bubble territory.
This is simply caused by political and regulatory failure at the local level ( Suffocating Bureucracy & Failed Institutions 0 , where costs get out of control and Local Government loses the capacity to meet its infrastructure responsibilities and cope with normal growth.
Note what Michael Lewis writing in Portfolio com said, as I noted early 2009 in Housing Bubbles And Market Sense after the 07 / 08 collapse, triggering the Global Financial Crisis …
“At the end of 2004, Eisman, Moses and Daniel shared a sense that unhealthy things were going on in the housing market. Lots of firms were lending money to people who shouldn’t have been borrowing it. They thought Alan Greenspan’s decision after the internet bust to lower interest rates to 1% was a travesty that would lead to some terrible day of reckoning. Neither of these insights was entirely original. Ivy Zelman, at the time the housing market analysis at Credit Suisse, had seen the bubble forming very early on. There is a simple measure of sanity in housing prices, the ratio of median house price to income. Historically, it runs around 3 to 1, by late 2004, it had risen nationally to 4 to 1.’All these people were saying it was nearly as high as some other countries’ Zelman says ‘ But the problem wasn’t just that it was 4 to 1. In Los Angeles it was 10 to 1 and in Miami it was 8.5 to 1. And then you coupled that with the buyers. They weren’t real buyers. They were speculators’. Zelman alienated clients with her pessimism, but she couldn’t pretend everything was good. ‘It wasn’t that hard in hindsight to see it’she says ‘It was very hard to know when it would stop’. Zelman spoke occasionally with Eisman and always left these conversations feeling better about her views and worse about the world. ‘You needed the occasional assurance that you weren’t nuts’ she says. She wasn’t nuts. The world was.”
And too, Herb Greenberg in  Marketwatch late 2007 with Straight Talk on the Mortgage Mess from an Insider .
It sure is interesting going to the ANZ Bank’s Home Mortgage Low Deposit Information Page , promoting family / friend gifting and putting their homes up for additional security … whatever else as well. Then the Borrowing Calculator | How much can I borrow? | ANZ Store , where on a $100,000 individual income they can borrow up to $781,000 … a joint income $699,000.
There is no mention of course of the risks and the life-time consequences involved, in endeavouring to circumvent the RBNZ’s LVR guidelines, coupled with the extraordinarily high Lending Multiples of about 7.0 to 8.0 times household incomes.
Can someone point out to me please where there has been a sustained  housing bubble (or any bubble for that matter) in history ?
Hugh Pavletich

What is normal growth

What is normal growth exactly?

Whatever Hugh says it is. As

Whatever Hugh says it is. As he notes above he has repeated the same thing for the last 9 years - therefore it's a fact.

"Can someone point out to me

"Can someone point out to me please where there has been a sustained  housing bubble (or any bubble for that matter) in history ?"
Tautological question - a bubble pops - so if it was sustained it wasn't a bubble.

Interestingly,  ANZ's home

Interestingly,  ANZ's home page features home loans and credit cards. Nothing else.
The bank I use in Germany features investment planning for retirement and tips on how to reduce bank charges. And an art exhibition they're sponsoring.
Deutsche Bank website's similar. Without the art exhibition....