sign up log in
Want to go ad-free? Find out how, here.

Bank's vie for lowest-rate claim in rapid-fire mortgage rate reductions in the key one and two year terms, following wholesale rates down

Bank's vie for lowest-rate claim in rapid-fire mortgage rate reductions in the key one and two year terms, following wholesale rates down

Just when ASB had claimed the lowest home loan rate in the mortgage market, Kiwibank has bumped them off their perch.

This morning (Saturday), Kiwibank has announced a new one year 'standard' home loan rate of 5.69%.

It will be effective at 8am on Monday. It has made no other changes.

Earlier, ASB followed BNZ by reducing its one and two year home loan rates.

Both of ASB's reduction are for its 'special' sub 80% LVR offers.

That means they have added a new low rate for the one year fixed mortgage term. That rate is 5.70%.

For the two year 'special', the rate is reduced by -24 bps to 5.75% from 5.99%.

Both these rates were market-leading until Kiwibank grabbed the one-year initiative.

Kiwibank's new one year rate is the lowest mortgage rate being offered by any bank in New Zealand, for any term.

ASB joins BNZ and HSBC in offering a 5.75% rate for two years.

These ASB changes were effective at 5pm Friday.

None of ASB's standard rates have been changed. The same changes have been made to BankDirect rates, and Sovereign have also now made the same changes. although we have not yet heard of similar changes to the Sovereign offerings which usually follow ASB in lock-step.

Although there was a noticeable rise today (Friday), overall New Zealand swap rates have recorded a sharp fall this week following offshore moves.

This sinking trend gives banks room to reduce fixed rates further if they choose, and in the past week, the Co-operative Bank, BNZ and now both ASB and Kiwibank have made that choice.

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

The current incentive offers are here.

This is how the updated mortgage rates will compare as at 8:00 am Monday, October 20, 2014:

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 5 yrs
           
5.75% 6.25% 5.99% 6.49% 6.99%
ASB 5.70% 6.30% 5.75% 6.19% 6.99%
5.89% 6.25% 5.75% 6.19% 6.99%
Kiwibank 5.69%   5.89% 6.19% 6.79%
Westpac 6.09% 6.30% 5.99% 6.19% 6.99%
           
Co-op Bank 5.95% 5.89% 5.99% 6.19% 6.75%
HSBC 5.75%   5.75% 5.75% 6.99%
SBS Bank 5.85% 5.99% 5.99% 5.89% 6.79%
5.95% 6.05% 5.79% 6.30% 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 »
--------------------------------------------------------------

Fixed mortgage rates

Select chart tabs

unweighted
unweighted
unweighted
unweighted
unweighted
unweighted

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

17 Comments

Resistance is futile. Global interest rates, commodity prices and prices are sinking. 

You cannot keep pricing money at high prices when a shrinking number of borrowers are prepared to pay that high price of renting money.   Why would they in the light of declining prices of everything else? 

 

 

Up
0

NZ highest mortgage rates in the developed world

http://www.nzherald.co.nz/mortgages/news/article.cfm?c_id=516&objectid=…

 

 

Up
0

Lets examine "your" logic.

a) Everywhere (that matters, ie developed world USA, EU) else has a low OCR but also a housing bubble,

ergo whatever the OCR in NZ is it wont make a damn bit of difference to the stupidity, greed or desperation that is in our housing market. So it might as well be low.

Personally I cant see a counter argument to this that holds water?

So logically having a high OCR must be for another reason.

excluding ignorance and/or dogma that is.

Can we exclude these? given the CB's around the world's wish to raise OCR's due to frankly their wedded nature to monetray policy Im not so sure.

Otherwise,

b) Not having a low OCR means there is enough margin for foreign investors to want to lend to us.  

If we had a low OCR what would happen? our retail banks would have to borrow at rates higher than the OCR? and hence wouldnt hide behind the NZRB.   tough for them.

c) Businesses might enjoy cheaper lending, how is this  bad thing?

d) The exchnage rate maybe lower, how is this a bad thing?

e) We might see more export jobs being created, (or at least not losses) how is this a bad thing?

f) Maybe housing developers will build (more) as their cost to borrow is low, how is this a bad thing? more jobs?

What has been the CPI over the last 12~18months?

Isnt the trend downward?

so why the F*** is our OCR so high.

regards

 

 

Up
0

Maybe it's because of Kiwis easy going 'she'll be right" attitude and tolerance for high prices, including the high price of borrowing.   

It can't be due to the exchange rate or due to so called 'inflation'.  Maybe the OCR is dictated to NZ from other global interests, not internally.  

Up
0

Please review the foreign wholesale borrowing and hedging cost premium charts (page 19 of 53), which account for about ~32 -37% of total lending above the domestic deposit base.

 

Then add some bps to these risk and liquidity premiums since the NZDUSD has fallen off its perch and corporate yields have blown out against sovereign debt in most jurisdictions.

 

It may then occur to you that the OCR may not be the marginal mortgage interest rate cost determinant.

 

Up
0

New Zealand amongst other nations can no longer afford to indulge public servants dictating terms from the sinecure of taxpayer funded $630,000 salaries.

 

Once in a blue moon officials commit truth in public, but the intrepid leader of Germany’s central bank has delivered a speech which let’s loose of three of them in a single go. Speaking at a conference in Riga, Latvia, Jens Weidmann put the kibosh on QE, low-flation and central bank interference in pricing of risky assets.

 

 “The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.

 

Needless to say, that is not only the truth but its one that is distinctly unwelcome to the policy apparatchiks in Brussels and the politicians in virtually every European capital. Self-evidently, printing money and running up the public debt are pleasurable and profitable tasks for agents of state intervention. But reducing “structural barriers” like restrictive labor laws, private cartel arrangements and inefficiency producing crony capitalist raids on the public till are a different matter altogether. In the political arena, they involve too much short-term pain to achieve the long-run gain.

 

But implicit in Weidmann’s plain and truthful declaration is an even more important proposition. Namely, rejection of the mechanistic Keynesian notion that the state is responsible for every last decimal point of the GDP growth rate. Indeed, the latter has now become such an overwhelming consensus in the political capitals that to suggest doing nothing on the “stimulus” front sounds almost quaint—-a throwback to the long-ago and purportedly benighted times of laissez faire. Read more

 

 

 

Up
0

Council valuations of Auckland homes have jumped by almost a third on average, new figures reveal.

 

Auckland Council will tomorrow release new valuations for more than 220 suburbs across the region for three-yearly review of CVs.

 

The figures will show properties in 10 areas have had an increase to their valuation of 50 per cent or more over the past 12 months; including Hobsonville which has jumped by a massive 65 per cent. Read more 

 

The not so hidden costs of asset pump schemes? I am sure ratepayers in some districts will revolt or default if the rates of rates increases persist. in line with the property revaluations.

Up
0

Well AKL is already spending a million dollars a day in interest on it's debts and it's important it's assets stay healthly, their assets, the ability to tax other peoples properties.

For every extra million in income, think how much extra borrowing that will sustain.

 

 Its all fun and games until someone loses an eye.

Up
0

How about 20.5% for a mortgage rate?  Yes, New Zealand double the rate. 

How many farms, orchards and businesses were destroyed in the 80s due to this foolishness? 

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11344402

 

Up
0

What do you think the inflation rate was then mate ?

Up
0

Those were the good old days. Borrow to the eye balls and watch your asset grow.

Up
0

It took them a while, expect mor drops as dairy continues its slide.

This is what I mean when Fonterra payoutsdrag the rest of the economy down, its why very few have got any payrises. Dont come back to NZ because things are no better off here.

Up
0

CPI on track for 1.0 or below

http://www.stuff.co.nz/business/money/10635850/Low-inflation-set-to-hol…

Where is the runaway inflation, that OCR hikes are predicted for?   

Up
0

Why is our OCR so high? It should be cut back to 2% or 2.5% - there is minimal inflation and a low OCR will reduce the strength of our dollar. Wheeler needs to have a serious rethink as deflation looks more likely - Europe and USA heading back into recession and unlikely to recover for years.

Up
0

Hit your bank hard and you should be able to get at least 0.5 to 0.75 off most published rates and under 5% for a 12 month fixed rate. DO NOT pay published rates - banks now expect to discount or perhaps stay floating as lower fixed mortgage rates are a certainty. People who rushed to fix over the last 3 months are going to seriously regret it.

Up
0