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Two more banks slice home loan rates as mortgage market competition heats up. New market lows breached

Two more banks slice home loan rates as mortgage market competition heats up. New market lows breached
<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Both ANZ and the Co-operative Bank have announced fixed home loan rate cuts.

The ANZ change is a simple one. They have matched Kiwibank's new two year 'special' rate of 5.55%.

That is a deduction of -20 bps from the level of their previous 'special' for that term.

At the same time they have reduced their standard two year rate to 6.09%, down -10 bps from 6.19%.

But the more interesting changes are coming from the Co-operative Bank.

They have cut rates for all terms from one to five years.

The Co-op Bank's new one year fixed home loan rate is now 5.59%, a reduction of -10 bps.

They have adopted the 5.59% level for their 18 month and two year terms as well and for eighteen months, that is now the market leading rate.

Their three year rate has been cut to 5.74%, a reduction of -25 bps.

Their four year rate has been lowered by -41 bps to 5.99% which matches ASB's 'special' for that term.

And for five years their new rate is 6.25% which is a -24 bps reduction.

All the Co-operative Bank's rates are 'standard' rates and don't have 'special' conditions.

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

The current non-rate incentive offers are here.

This is how the updated mortgage rates will compare as at 8:00 am Wednesday, January 21, 2015:

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 4 yrs 5 yrs
             
5.59% 5.70% 5.55% 5.99% 6.49% 6.59%
ASB 5.59% 5.70% 5.75% 5.59% 5.99% 6.49%
5.69% 6.09% 5.75% 5.59% 6.49% 6.59%
Kiwibank 5.69%   5.55% 5.89% 6.39% 6.49%
Westpac 6.09% 5.75% 6.39% 5.99% 6.79% 6.49%
             
Co-op Bank 5.59% 5.59% 5.59% 5.74% 5.99% 6.25%
HSBC 5.45%   5.65% 5.99% 6.49% 6.79%
SBS Bank 5.59% 5.74% 5.49% 5.69%   6.19%
5.70% 5.90% 5.70% 5.95% 6.40% 6.50%

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

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15 Comments

Interest rate cuts. 

More competion in the fixed term space. 

Other banks will be following with their interest rate cuts. 

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Think the RB will drop the OCR this year?  got to wonder....50/50? or more sure?

 

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The OCR is becoming irrelevant. 

The problem for banks is that the mortgage floating rate is overpriced. 

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OCR - agree, when it goes lower it will be interesting to watct  that one unfold.

Not sure I follow you on the retail rate, banks foreign wholesale could go up, which will get interesting, though I dont know what the degree of exposure is.

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But surely this will just further fuel the Auckland housing market?

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That is possible, though I'm wondering if the banks can go much lower due to their funding sources costs, + a margin. Hence my comments, on them being left exposed as the OCR retreats, politically? ouchie. The Q is should, or can we afford to care about a few over-priced surburbs and stupid ppl paying too much?

The Q is how many.

 

 

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Steven youre right - I seriously doubt that there will be an OCR cut this year because of housing situation, but the RBNZ may still find mortgage rate a bit lower yet (something they won't like) if bank funding costs above OCR continue to fall - and I suspect thats pretty likely barr another offshore crisis event. But without an OCR cut its unlikely it will be that material, and talk of 4.99% floating rates is just fairyland stuff.

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4.99% rates in 6 - 8 months?

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I would be purshing for at least 4.99% today on 6 months fixed term...

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The NZ economy is seeing light at the end of the tunnel... but then again it could be another GFC train is coming!

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not only is the floating rate still high (is this sourced differently than fixed rates?) but also the 6 month fixed terms are higher than the banks special rates for 1 and 2 years. Seems the banks dont want us on short term rates and are trying to bait us onto those rates, it was the 2- 3 year fixed rates 6months ago, what do they know..?

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The fixed rates that banks are trying to tempt customers into now, will be revealed as exorbitant rates  in the near future as rates keep declining. 

The so-called "Floating" rate is not really floating anymore - the floating rates do not move or float in synch with the OCR or other wholesale rates. .  Yes, you're right they don't want you on floating as you will then be flexible to take advantage of newer lower rates in the near/medium future. Unfortunately, you are paying a big premium to stay flexible and floating.

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i'm fixed at 6 months and asking for discounts to bring the rate under the 1 year rate, I have been doing this ever since i started reading the comments section of this website... its been working far better than listening to the advise of my mortgage broker, who suggested I fix for 3 years at 8.75% in early 2007 (you will all know how that turned out) or the banks who were keen for me to fix for longer just 8 months ago...

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C'mon Westpac, y'all still on holiday? You're the outlier now, with one and two year rates 0.5% above everyone else.

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Westpac have a lawyer acting as CEO currently, so satisfying customer borrowers is lower priority than maximising returns to Australian parent. 

You need more Westpac borrowers taking up the Kiwibank 5.5% deal along with the $2000 incentive before they move.  Under the previous CEO WP were often the first to move rates down. 

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