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BNZ and SBS Bank settle on a 6.09% rate for a two year fixed home loan; conditions and incentives become important in finding a good deal

BNZ and SBS Bank settle on a 6.09% rate for a two year fixed home loan; conditions and incentives become important in finding a good deal

This morning both BNZ and SBS Bank have adopted the 6.09% two year home loan rate.

The BNZ offer at this rate is for their 'Classic' version, requiring at least a 20% equity.

The SBS Bank (and HSB Bank) version is a standard rate offer.

6.09% for two years is also offered by ANZ and Westpac.

An even lower sub 6% rate for this term is being offered by ASB, Kiwibank, and TSB Bank.

HSBC even has a 5.85% two year offer rate for clients who qualify for their Premier status.

The lowest non-conditional two year rate is by Kiwibank at 5.99%.

Mortgage rates in the one to three year range are generally soft at present and we have seen renewed rate competition in this zone since the last RBNZ OCR rate hike late last month.

With a pause signaled by the central bank on more hikes until after the election and falling international bond yields, the New Zealand swap markets have been reflecting these shifts and the cost of funds allows banks to offer sharper rates.

With the home loan market being in relatively low-growth mode, banks are increasingly competitive. Non-rate inducements are also growing in importance, especially cash incentives.

Banks bundle these incentives when they negotiate so borrowers will need to be careful and clear of their objectives in these discussions. Use a mortgage calculator that displays the full cost of your loan when you are making these assessments.

See all banks' carded, or advertised, home loan rates here.

This is how the updated mortgage rates compare as at 9:00 am Tuesday, August 5, 2014:

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 5 yrs
           
6.05% 6.25% 6.09% 6.65% 7.15%
ASB 6.09% 6.30% 5.99% 6.65% 6.99%
5.99% 6.25% 6.09% 6.25% 6.99%
Kiwibank 5.99%   5.99% 6.65% 6.95%
Westpac 5.95% 6.30% 6.09% 6.65% 6.99%
           
Co-op Bank 6.00% 6.00% 6.00% 6.25% 6.89%
HSBC 5.85%   5.85% 5.85% 6.99%
5.85% 5.99% 6.09% 5.95% 6.79%
6.00% 6.05% 5.99% 6.60% 7.00%

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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 »
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Fixed mortgage rates

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