New Zealand's largest home loan lender resets its two year rate lower, now almost the lowest for this term in the market. Westpac follows partly

Following ASB, which cut a rate earlier this week, ANZ has now cut -10 basis points off its two year fixed mortgage offer.

The new 'special' rate is now 4.75%. The new 'standard' rate is now 5.25%.

This move suddenly takes ANZ's offer to be the lowest carded rate for two years for any bank (other than the 4.29% offer by HSBC Premier).

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.

The last time ANZ changed a home loan rate was on July 1, 2017 when it raised its one year rate.

Wholesale swap rates have been trending down since July 4, 2017 when they reached 2.38% for a two year term. It is are now at 2.19%. Other than that July spike, the two year swap rate has been under 2.25% since early May.

The last time ANZ changed its two year rate was in early May when it was raised +6 bps from 4.79% to 4.85%. This latest change takes the ANZ two year rate back to where it was in early February 2017.

Update: Westpac has also cut its two year rate. It reduced its 'special' by -6 bps to 4.79% and cut its 'standard ' rate by -10 bps to 5.19%

In addition, yesterday, the Co-operative Bank announced it had trimmed its three year rate to 5.09%, matching almost all other banks for that term.

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 4.75 5.59 5.89 6.09
ASB 4.95 4.45 4.70 4.79 5.09 5.59 5.79
5.35 4.59 5.05 4.79 5.09 5.89 6.09
Kiwibank 4.99 4.45   4.79 5.09 5.75 5.99
Westpac 5.25 4.59 5.15 4.79 5.09 5.89 5.59
               
4.80 4.59 4.75 4.85 5.09 5.55 5.75
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 4.79 4.99 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 6.20%.

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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22 Comments

I can't remember a correction happening so fast, why are banks dropping when not forced to ,hope people don't start panicking, specially after the election, it's starting to get hard to decide if national and co or labour and co would make any difference to the housing market , specially with peters

Our household has a decent income, largely because I work a second job letting us repay the bulk of the mortgage quickly. Around six weeks ago I made a large lumpsum mortgage repayment. I soon had a call from a friendly bank employee. He was almost begging me to "leverage up". His unsolicited words. He seemed desperate to get a refreshed claim on our income stream. I was left wondering if theres big trouble brewing in this banks mortgage book.

More likely that a system generated notification initiated a sales call.

Your probably right. However I've had similar calls in the past, and this time the banks staffer really pushed the point.

That's how banks make money, by lending to people who have good repayment history. It's somehow ironic, the less you need money, the more the banks are willing to lend you, the reverse is also true

I just bought my first home last November, I am looking to purchase an investment property.
Yeap I'm wanting more debt

It could be that a significant chunk of existing fixed rates are coming off term. The market is flush with term money it has to find a home for and the banks will fight for it. Given the terms it's clear they want the better end of the market risk.

How about a cut in the floating mortgage rates?
Isn't that the point of floating rates?

It is a bit like saving at the moment, where they want to lock people into a longer term. You will see banks are now reducing on call savings, and term deposits under a year, to try can lock savers into term deposits over over 1 year.

Probably because they announced an increased profit last week . Follows customers will want lower rates.

Guessing they are wanting to lend more, maybe because house sales have slowed. So it is a bit of a race to the bottom. Removal of the LVR may help get first home buyers onto the ladder of fire fasters too. Gives banks the ability to also lend out more. But is it really the best thing for first home buyers? Or do with need a DTI. Surprised no political party has really talked much about introducing a DTI.

Cash incentives are back on the table too, offered $3500 by ASB and $5000 by ANZ to move lending from BNZ this week

Thanks, if you don't mind, keep us updates on the rates you get offered for the various terms

Can i ask what is the loan size is?

Amount of borrowing and LVR would be helpful/interesting if not too much info.

In December 15 I got 4.25% for 2 years from ANZ on $1.3m with LVR of 50%. ANZ paid $10,000 cash back. Looking for same or better this December on $1m borrowing.

The best I could get was 4.34% for one year a couple of months back - I'd be interested to know what you get - I'm only interested in lowest rates in the six months to 18 months bracket.

Thanks for the info. I don't mind two year terms if the rate is low enough and the bank throws in some cash. They are more likely to offer cash back if you fix for 2-3 years. Any shorter and the cannot sell the cashback to their manager, any longer and you are stuck with a high rate for 4 or more years. So far two yeas has been the sweet spot.

Declining interest rates are in the best interests of housing affordability. A leg up for first home buyers would be a good thing right now.

But the flip side of the coin is that if the trend continues, the current softening in the housing market may be short-lived.

I have just been informed by my mortgage broker that Westpac are adding a 'premium' for investment property mortgages. This is when I asked for re-fix. She is investigating further and has not given me rates yet. The game appears to be changing.

Westpac have been doing this with "commercial" residential properties (IE rentals) for months, due to rules from the Reserve bank.

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