Seven percent mortgage rates are imminent.
ANZ, New Zealand's largest home loan lender, has raised its five year fixed rate by +50 basis points to 6.95% in sweeping changes across their rate card.
All ANZ's new fixed rates are now market highs.
The bank has no carded offers below 5% anymore.
Its new one year fixed rate 'special' is 5.35%, also a +50 bps jump.
The new two year fixed rate 'special' is 5.80% and a +45 bps hike.
The new three year fixed rate 'special' is 5.99% and a +34 bps rise.
At these new levels ANZ has put some considerable distance between itself and its main rivals, space those rivals are very likely to take up soon.
These hikes come after sustained wholesale swap rate pressure, but also as wholesale markets hesitated Monday, a hesitation that has now extended for the past four trading days.
Ironically, this ANZ move has well covered the Co-operative Bank's mistaken jumbo rate hike earlier in the day, one the Co-op Bank has now corrected. If the main banks all fall into line with ANZ, the Co-operative Bank's new rates might actually look appealing to borrowers who are about to re-fix.
Re-fixing is now where the mortgage market is focused. These re-fi (refinance) transactions look the most appealing to banks when the underlying real estate transaction activity goes into hibernation, as it is at present.
As well as bumping up mortgage rates aggressively, ANZ has raised term deposit rates (TD) sharply too. We will have more on these changes separately, but you should know that ANZ's new six month TD rate was raised by +25 bps to 2.75% and its one year TD rate was raised by +50 bps to 3.65% pa. At very long (and not popular) end, they now offer 4.10% pa for three years, 4.30% for four years and 4.40% for a fixed five year term deposit.
One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculator which is also below. (Term deposit rates can be assessed using this calculator).
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. But break fees should be minimal in a rising market.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at June 21, 2022 | % | % | % | % | % | % | % |
| ANZ | 5.35 +0.40 |
5.35 +0.50 |
5.65 +0.50 |
5.80 +0.45 |
5.99 +0.34 |
6.85 +0.50 |
6.95 +0.50 |
 |
4.95 | 4.85 | 5.09 | 5.35 | 5.65 | 6.35 | 6.45 |
 |
4.69 | 4.85 | 5.09 | 5.19 | 5.65 | 5.89 | 5.99 |
 |
5.10 | 4.85 | 5.19 | 5.39 | 5.55 | 5.79 | |
 |
4.85 | 4.85 | 5.09 | 5.19 | 5.49 | 5.79 | 5.89 |
| Bank of China | 4.45 | 4.80 | 5.10 | 5.40 | 5.70 | 5.90 | |
| China Construction Bank | 4.35 | 4.45 | 4.85 | 5.19 | 5.45 | 6.15 | 6.35 |
| Co-operative Bank - revised |
4.85 +0.36 |
4.85 +0.36 |
5.15 +0.22 |
5.35 +0.16 |
5.65 +0.20 |
6.35 +0.60 |
6.45 +0.50 |
| Heartland Bank | 4.40 +0.22 |
4.90 +0.06 |
5.10 +0.15 |
||||
| HSBC | 4.79 | 4.69 | 5.04 | 5.29 | 5.54 | 5.94 | 6.04 |
| ICBC | 4.39 | 4.45 +0.06 |
4.85 | 5.09 | 5.45 | 5.69 | 5.89 |
 |
4.65 | 4.55 | 4.89 | 5.19 | 5.39 | 5.79 | 5.95 |
 |
4.45 | 4.34 | 4.90 | 4.99 | 5.35 | 5.55 | 5.75 |
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140 Comments
Pretty sure it was only 18mths ago the RBNZ Governor was asking banks to go out and lend and encouraging people to borrow while rates were low … can’t imagine he’ll issue the lost generation an apology when they fall into negative equity (if they’re not there already).
That's because mortgage brokers want you to fix for 1 year and then come back and refix through them - easy quick cash for minimal work. I've come across people that have literally been told by their broker they can only fix for 1 year. There's a lot of scum out there.
One might get the impression they are trying to ruin people deliberately. Hiking rates into an already falling market??
To fight inflation that has been caused by bouts of money printing, how could this monster inflation possibly be stopped via interest rate hikes??
The best thing now would be to allow inflation to run its course.
But, again, one might get the impression they are out to destroy the economy.
Because when the cost of money increases, eventually the wider system will use it less.
Less volume of transactions, less demand, lower inflation.
Higher rates world wide also mean we need to keep ours higher in order to keep the nzd stable (high), lower nzd = cost of everything increases (inflation)
They want you to stop spending money, though only to the point of recession, then you can spend again...
Congrats to all those who took out 3% 5 year fixes last year. Had to regretfully give mine up in December.
Currently 6 months in to a 4.95% 5 year fix. If rates do ever drop below this again, I'll gladly entertain the idea of breaking to a lower rate. I wouldn't want to be 6 months in to a 1 year or 2 year fixed period.
Despite having a 50% cash deposit (Deed of Debt) to bridge our purchase, they insisted we use a portion of that to settle the previous mortgage.
I think we managed to screw them back slightly, by drawing down the maximum we could borrow with 1/3rd of the balance on a flexible facility, taking the $5k cash contribution and then 2 weeks later clearing the flexible facility with the proceeds from sale. I believe the Cash Contribution would have otherwise been $3k to $3.5k. 2 weeks of interest was roughly $200 @ 3.95%.
This made me laugh.
But seriously, landlords are in a bind because with the number of people leaving for overseas and all those houses being rented instead of sold, there isn’t a shortage of rentals to enable a rent increase.
I guess the landlords could sell their rental in a falling market….
Yes I get the feeling certain people believe that landlords can never take a loss on their investments (i.e. they are completely, 100% riskless) because either the customer or the regulator carries all of their risk for them to prevent these losses from ever occurring.
Sounds like a shallow threat...the kind where you attempt to force blood from a stone.
"Hey you poor person that doesn't own a house....look, I took on too much debt to buy a rental and mortgage rates have gone up, so you are going to have to cover my losses....sweet as eh?"
Im just saying, that along with all the frothing at the mouth people might want to have at a handful of over leveraged landlords that'll come unstuck in the near future, is the sad reality that the poor are about to get a lot poorer, and the games going to keep getting played for a while yet.
Yeah we don't know what your selection criteria is, although NZ had been fairly popular for poms of all ages for a couple hundred years.
For working age people (who need to work a local job), you'd be encompassing in large amounts of Europe as being worse. Italy, Spain, Greece, most of the countries in the East.
Maybe like Luxembourg or Monaco is good, if you've inherited money and/or property there?
Their lower house prices relative to incomes are indicative by the overall level of malaise in their economies, and less so an indicator of better living conditions.
My money goes a lot further there, because I'm not Spanish or Italian.
So I guess the take-home is the world is your oyster, if you're Anglo-Saxon.
All things being equal, an economy with higher employment and wages will have higher prices than one that is lower.
If you look at places with the lowest prices relative to incomes, they're usually pretty dire places to exist economically.
Anyway, piles or slab down yet? Only 3 weeks for me then ✈️✈️✈️👍👍👍✅✅✅. Although I'm a dumbarse, I like moving to a house that already exists.
All things being equal, an economy with higher employment and wages will have higher prices than one that is lower.
This is correct.
If you look at places with the lowest prices relative to incomes, they're usually pretty dire places to exist economically.
This is economically illiterate garbage. There is no correlation whatsoever in "dire economic existence" in the house price to income ranking provided below.
https://www.statista.com/statistics/237529/price-to-income-ratio-of-hou…
House is progressing splendidly. It's unfortunate that you are still stuck down there for three more weeks. No wonder you never miss an opportunity to project your small **** syndrome.
This is economically illiterate garbage.
There's a lot of places round the world where you can buy property for far lower price:income ratio than the small list of 33 places you keep posting. Generally, the lower you go the worse the area.
Your initial summation was places with better price:income ratios offer a better quality of life, on its own that indicator isn't the best yardstick. But I guess it's the only one you had, and reasoned debate isn't one of your strong suits.
Not sure why you're so salty with all the splendid progress, I'd have thought you'd be perking up the closer you get to paradise.
So you are unhappy that the OECD data doesn't support your economically illiterate assertions? Your argument is demonstrably false and the evidence has shown it.
Your vapid bluster and "reckons" is not evidence of anything much except that you have no idea what you are on about.
The med is quite salty, but I'm having a great time in the European summer at the moment ✈️ ✅.
Isn't it well past your bedtime now?
So you are unhappy that the OECD data doesn't support your economically illiterate assertions?
The data is fine, my comment was relating to the wider world, but it also is relevant to your list, to varying degrees.
You're having a great time in the European summer still being a prat on an NZ economics site? Sounds just as lame as if you were in Whangarei.
You have provided no data. And any data you do eventually provide will be skewed because the countries are not developed countries. That's why we do OECD comparisons.
Being a skilled professional ✅, I'm working remote in the summer for a bit.
It's nice to give my mind a break every now and then by indulging in low IQ conversations with some of the characters on here.
Very unlikely - I actually see a much greater chance of people leaving NZ rather than migrating here. The only way to make NZ attractive to migrants, especially if compared to AU, is to have housing in NZ come down to sustainable levels - and in order to achieve that, houses have to come down in price by at least 40% min.
People are still leaving. June currently a 13k loss on the borders, on top of the 31k loss so far this calendar year. And 31k last year. And the 36k in 2020. So that's 111k more people that have left than arrived. 3.9 average occupancy rate for a rental = 28,000 empty rentals.
- Jan - 6.7k loss
- Feb - 8.3k loss
- March - 6k gain
- April - 16k loss
- May - 6.4k loss
https://www.customs.govt.nz/covid-19/more-information/passenger-arrival…
Of course. Without that information we can only speculate I guess? But let's work on 1/3rd (2/3rd are home owners in this country) then that's still 9k rental properties worth of people that are at least temporarily out of the country.
It wouldn't be too far fetched to assume the ratio of "renters" that are out of the country would be higher than home owners, as they seek home ownership opportunities elsewhere, but that would also be speculation.
We cant really work on much, because
a) outbound tourism/emigration from NZ is only just coming back, with 24 months pent up demand
b) unencumbered inbound traffic is even newer
C) reading much into anything over our winter is folly. It could be 90% home owners going to Raro, or 90% renters escaping inflation and recession in *insert hypothetical country*
D) not every renter leaving is doing so permanently, not are they guaranteed to be a lease holder and not a flatmate.
I guess when we see available rental properties skyrocket on trademe in the coming months, we'll know whether the prophecy holds water.
Exactly. We can't really work on much, but it doesn't mean we should discount the numbers.
I mean, I've got nothing to lose. I'll keep periodically looking at the customs border movements, CCC certs, interest rates movements etc and chiming in with my thoughts. I can't help but wonder if your comment is driven by wishful thinking and vested interests.
They're definitely dropping where I'm looking... a whole new round of drops just this morning.
No new rental listings, however, so this undesirable will just keep waiting :P
But I had a quick gander at property for sale in the area: 15% less for sale, but a whole page listed for ~25% less than the previous cheapest a few months ago. I guess they've decided to stop obfuscating their desired price in the hoped they'll luck out on a sale.
Real Estate agents sending below email to all in their mailing list - once again trying to create FOMO ( for them even if few gets trapped is a win for them).
Seriously, they believe that interest rate touching 7% and may go up further and they trying to create fear / panic - just like spam email, even if one gets trapped and click the attachment, their job is done.
Hello,
After nine months of mortgage-lending pain, proposed changes will come into force on July 7, 2022, and have addressed some of the major pain points of the original version of the CCCFA.
If you are currently pre-approved for a mortgage, you have a month or two to snap up a bargain until buyers start to trickle back into the market.
And if your application was deferred in some way in the past nine months, it is time to get a budget together - you still need to show how you will control your spending in the future - but consider reassessing if you can purchase a property in July. You may find the conditions have changed in your favor.
Read the full article here
https://www.oneroof.co.nz/news/41671?utm_source
Add to this the 5% deposit for First Home Buyers and we may see a small lift in the number of house sales next quarter.
I can’t help but feel the RBNZ has gone too far and too fast with interest rates. There are going to be a lot of people locking their wallets away when they have to refix, the economy is going to tank. But that is unlikely to drop the price of petrol, in fact a tanking economy will probably just devalue the kiwi more and make it more expensive.
Galloping inflation is swamping the western world now. 4th largest economy on earth Germany just pumped out a 33.6% PPI tonight, CPI will follow to a certain degree. Mortgage rates here will probably go to double figures by year end.
https://twitter.com/Schuldensuehner/status/1538783414798716928
The problem is unfortunately you just can't bet against the FED. Structurally the system is broken, and if not for government intervention and stimulus, this would have ended a long time ago. I never thought after 2008 that we could have kicked the can as far down the road as we already have. There's just no way of knowing how much road is left and to what extremes governments will go. Savings rates are negative with inflation, which drives average people and baby-boomers/retired people into risky investments in order to chase returns. These people have no businesses being in an overinflated equity bubble and will get crushed during the next correction with no capacity to rebuild (retired, not physically capable of returning to work or earning an income). If you do the right thing and pre-emptively move to cash and a crash doesn't come because governments step in and stimulate/bailout, then inflation eats away at your capital, if you stay in the market you risk loosing 20-50% in a black swan event/collapse. We are living in very scary and uncertain times, all created by our Labour government in particular Orr and his cronies.
The problem is unfortunately you just can't bet against the FED. Structurally the system is broken, and if not for government intervention and stimulus, this would have ended a long time ago. I never thought after 2008 that we could have kicked the can as far down the road as we already have. There's just no way of knowing how much road is left and to what extremes governments will go. Savings rates are negative with inflation, which drives average people and baby-boomers/retired people into risky investments in order to chase returns. These people have no businesses being in an overinflated equity bubble and will get crushed during the next correction with no capacity to rebuild (retired, not physically capable of returning to work or earning an income). If you do the right thing and pre-emptively move to cash and a crash doesn't come because governments step in and stimulate/bailout, then inflation eats away at your capital, if you stay in the market you risk loosing 20-50% in a black swan event/collapse. We are living in very scary and uncertain times, all created by our Labour government in particular Orr and his cronies.
Yes this has been both a National and Labour issue....actually its been a failure of democracy as it appears powerless to a failing neoliberal economic way of viewing the world. Its like a blackhole that sucks in any ethical regulator or politician to actually do the right thing and show some real leadership (as opposed to taking the easy/can kicking option)
House prices were on the rise, and yet builders/developers got into money troubles.
Like an unseen vacuum, buyers flocked in, celebrated each month end with wine, beer and song.
And suddenly, the credit taps went dry.
From FHB to investor, from investor to mega landlord, from developer to house speculator, activity stalled. Pondering which route to take.
A paradox.
Nope, banks were stress testing at "rates of around 6 to 6.8 per cent". Oh dear, someone's gotta be stressing now..
We kept a small segment on 1 year, renewing late this year. I'm in two minds whether to pay some of it down or just to wear the slightly higher monthly payment (not that much, it's not a big segment). Feels like carrying the debt across and retaining more cash might have some benefit to it, given the extra cost is (we're fortunate compared to many) not consequential.
I fixed for 5 years in December, with repayments at a comfortable level. I have 4.5 years of certainty.
Would rather be in a position to negotiate lower rates/a break fee if the rates fall considerably below my current fixed rate, than trying to find an extra few hundred dollars a month increase in payments in 12 to 18 months time.
That said, rates are now 2% higher than in December.
why would you want to pay a break fee? The break fee is equal to the interest differential so you wont save any money on interest, but you have to pay the admin fee, so you are worse off.
The only reason i can think of to pay a break fee is in a rising interest rate environment, not when rates are going down.
Say last year you had 18 months to go, you might want to break that to lock in a 2.99% rate for 5 years. Your 18 months comes out in the wash as the break free is equal to any savings you make over the next 18 months. But then, if you have gambled correctly, in 18 months time you still have 3.5 years at 2.99% while otherwise you'd be refixing at 7%.
While i agree that rates will come back down, the timing of it is far from certain, and I doubt they will rise then fall back below where they currently are in less than a year. I'm hedging my bets, equal sized 2/3/4 year fixes, and minimum repayments. Can direct extra repayments to the highest interest tranche as they roll over.
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