Two key home loan lenders change rates, one hiking its one year rate, the other cutting its one year rate. Background wholesale rates rise

Effective Saturday, July 1, 2017, New Zealand's largest home loan lender is raising its one year fixed mortgage rate.

Their one year 'special' will rise by +6 bps to 4.55%.

It's standard one year fixed rate will rise by the same amount to 5.05%.

ANZ's 'specials' are available to customers with at least 20% equity, an ANZ transactional account with salary direct credited, plus any ANZ credit card or insurance. 'Specials' are not available with any package discount plans.

At the same time, Kiwibank has advised that it will be decreasing its one year 'special' rate by -24 bps to 4.45%.

This Kiwibank move will be effective on Monday, July 3, 2017.

These shifts mean that the Kiwibank rate will be directly rate competitive with ASB who have the same one year rate. 4.45% is a market-leading level (apart from the HSBC Premier rate).

ANZ last changed its mortgage rates eight weeks ago by raising their fixed rates. They changed on May 19, 2017, when they raised all their rates for terms from 18 months to five years. At that time, they also changed term deposit rates, putting some short term ones down and some long term ones up. They have not announced any parallel term deposit changes this time (so far).

The last time Kiwibank changed mortgage rates was on March 9, 2017.

In the wholesale money markets, rates have been low for a long time and the two year swap rate has been at broadly the same level for at least 15 weeks, with most of the slippage to the current levels happening in the first quarter of the year. But over the past few days, there have been some notable rises, even if that only takes these wholesale rates back to levels they were at six weeks ago.

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

Here is a snapshot of the fixed-term rates on offer from the key retail banks.

below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % % %
4.99 4.55 5.15 4.85 5.59 5.89 6.09
ASB 4.95 4.45 4.70 4.74 5.09 5.49 5.69
5.35 4.59 5.05 4.74 5.09 5.89 6.09
Kiwibank 4.99 4.45   4.79 5.25 5.75 5.99
Westpac 5.25 4.59 5.15 4.85 5.09 5.89 5.59
               
4.80 4.59 4.75 4.85 5.25 5.65 5.85
HSBC 4.85 4.09 4.09 4.29 4.89 5.29 5.59
HSBC 4.99 4.59 4.85 4.85 5.25 5.65 5.85
4.85 4.55 4.75 4.49 5.15 5.65 5.79

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

And TSB Bank still has a ten year fixed rate of 5.99%.

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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5 Comments

Float for a few months, keep an eye out for some lower fixed rates.

What is going on here. I received a letter from the Westpac the other day to say my base rate was increasing by 0.30 - 0.35 percent because of the change in cost of borrowing etc. This is against my paying off Debt over the last 12 mnths.

Well unless the longer term rates drop or keep increasing, inevitably the shorter term rates will also begin to rise. There is change on the horizon and I see banks increasing their rates to start to cover their asses.

Rates received today from ANZ (via a broker) for re-fixing. Thoughts?

Offered rates:
Rate type | Carded rate | Approved margin(+/-) up to | Actual Rate | Amount
Floating | 5.79 | -0.50 % | 5.29 %
Flexi | 5.90 | -0.50 % | 5.40 %
Fixed - 6 months | 4.99 | -0.60 % | 4.39 %
Fixed - 1 year | 5.05 | -0.64 % | 4.41 %
Fixed - 18 months | 5.15 | -0.56 % | 4.59 %
Fixed - 2 years | 5.35 | -0.70 % | 4.65 %
Fixed - 3 years | 5.59 | -0.60 % | 4.99 %
Fixed - 4 years | 5.89 | -0.54 % | 5.35 %
Fixed - 5 years | 6.09 | -0.54 % | 5.55 %

The one year, 18 month and two year rates look good. The low rate for five years would seem to imply that they are not expecting rates to go up markedly anytime soon.