On Monday following this long weekend we will start with a small flurry of fixed mortgage rate changes.
All of them are reductions.
Co-operative Bank kicked off the latest round reducing its 18 month offer -10 bps to 5.49% which is a market leading rate for this term. Co-op's rates are all standard, without 'special' conditions.
TSB Bank followed with a -20 bps drop for its two year 'special' rate to 5.50%, a -20 bps drop to its standard three year rate to 6.00%, and a -10 bps drop to its 18 month rate to 5.80%.
They in turn were followed by ASB and cousins who dropped their standard 18 month and two year rates to 5.99% and their 'special' two year rate to 5.45% which was a -20 bps reduction.
The BNZ chimed in with reductions to its 'Classic' 2 year rate, announcing a 5.39% level. It also added a new 'Classic' rate for a five year term of 5.79%.
These two BNZ changes have them claiming the lowest carded rate in the market for both terms, 2 years and five years.
Then TSB Bank jumped back into the limelight announcing a unique 5.89% rate fixed for ten years. This is the first time a ten year fixed home loan rate has been available to residential and property investor borrowers.
Finally, we have received information of reductions in fixed rates from another bank but those details are embargoed until Monday so you will need to check back then.
All of these changes are possible because wholesale rates have been sinking recently. You can get an idea of the scale of these recent wholesale changes by checking our swap rate charts.
Term deposit offers have also been sinking.
Banks seem to be shifting their focus back to a sharp rate and downplaying their non-rate cash and other incentives. But most still have those non-rate incentives still in place.
Any rate above 6% is now rare and uncompetitive. The lowest rate over any term is now BNZ's 5.39% 'Classic' two year offer.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how mortgage rates from the banks will probably compare as at 9:00 am Monday, February 9, 2015:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.45% | 5.70% | 5.55% | 5.99% | 6.49% | 6.59% |
 |
5.59% | 5.70% | 5.45% | 5.59% | 5.99% | 5.99% |
 |
5.69% | 6.09% | 5.39% | 5.69% | 6.49% | 5.79% |
 |
5.69% | 5.55% | 5.89% | 6.39% | 5.89% | |
 |
6.09% | 6.30% | 5.79% | 5.89% | 6.79% | 5.99% |
| Co-op Bank | 5.59% | 5.49% | 5.59% | 5.74% | 5.99% | 6.25% |
 |
5.45% | 5.65% | 5.79% | 6.49% | 6.49% | |
| SBS Bank | 5.59% | 5.74% | 5.19% | 5.49% | 5.79% | |
 |
5.70% | 5.80% | 5.50% | 5.95% | 6.40% | 6.50% |
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19 Comments
Yep, just keep kicking that bigger can down the road, while defending the indefensible.
The world economy is still built on debt.
That's the warning today from McKinsey & Co.'s research division which estimates that since 2007, the IOUs of governments, companies, households and financial firms in 47 countries has grown by $57 trillion to $199 trillion, a rise equivalent to 17 percentage points of gross domestic product.
While not as big a gain as the 23 point surge in debt witnessed in the seven years before the financial crisis, the new data make a mockery of the hope that the turmoil and subsequent global recession would put the globe on a more sustainable path. Government debt alone has swelled by $25 trillion over the past seven years and developing economies are responsible for almost half of the overall gain. Read more
SH. I have just seen Robert Peston's take on this http://www.bbc.com/news/business-31136707. Private folly and debt has been converted into public debt, post GFC.
Britain could be the next Ireland
Thank you Ergophobia.
I note the main risks for New Zealand remain a sharper reversal of Mrs Watanabe's NZD buying adventures and a significant US term rate reversal outlook.
Devaluation by China is the next great risk for a deflationary world
China’s Monumental Debt Trap—-Why It Will Rock The Global Economy
http://davidstockmanscontracorner.com/chinas-monumental-debt-trap-why-i…
Agreed mortgage belt - only a fool would pay a banks published rate. If you are changing banks use a broker to find you the best deal - you should be able to get half a percent off published rates and a nice lump some of cash to spend on a pacific island winter holiday. The banks are awash with cash and are competing hard to get rid of it!
5.25% for 5 years fixed or 4.95% for 3 years fixed should easily be able to be negotiated by your broker. Or wait another 3 months by which time swap rates will have slumped further and you should be able to secure a rate of 4.95% for 5 years fixed. The fact some banks are offering 5,89% for 10 years fixed surely tells us that lower interest rates for longer is the way things are heading over the next 10 years. No wonder the new car market is at record sales volumes as people put the flash set of wheels "on the house". Lookd like we are back into the house as a cash register phase - go Kiwis!
Don't get too cocky big blue. In 2009 all the commentators including Tony Alexander were saying long term fixed were going even lower than the 5.99 five year at that time. In fact that offer lasted about 2 weeks before the 5 year went back to 6.5 and then up around 8 from memory. In hindsight over that period the best option was the lowest short term rates which varied from high 4s to low 5s.
Feeling sorry for all the people who fixed their mortgages in the 6.2% to 6.5% range around 5 to 6 months ago. Perhaps they could sue the banks and their economists for the shockingly inaccurate forecasts that tempted them into fixing too high and too early. Wheeler has a lot to answer for too and he will also have to concede and slash the OCR within a matter of weeks.
Taking interest rates so negative that they threaten a run on bank deposits should not be seen as success --- it is failure. Creating bank reserves at that pace should not be seen as success --- it is failure. The next failure may well be some government-inspired restriction on capital inflows. Well, you could call such restrictions, and risking the liquidity of banks, monetary success if you like, but then you probably also think it’s a success to throw the ball one yard from the touchline.
http://www.zerohedge.com/news/2015-02-06/russell-napier-most-dangerous-…
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