Not to be left behind, ASB is the next major bank to raise home loan rates (according to their website changes this morning).
HSBC has as well.
They won't be the last with a global rush underway to raise policy rates which is likely to kick our local wholesale money costs sharply higher later today. Don't be surprised if both BNZ and Kiwibank push through their hiking versions either later today or early next week.
ASB has chosen to match ANZ's new high benchmarks across the board.
At this point, the result is that places TSB's current offers are among the 'best' available at present.
TSB's one year rate is now -69 bps lower than ANZ, ASB or Westpac. It is -30 bps lower than Kiwibank.
They also have good advantages for rates of 18 month to three years as well.
And for four years, their advantage over ANZ is a massive -120 bps, over a five year term it is a -130 bps advantage.
Compared with ASB these two longer term advantages are -44 bps for each term. Less, but still considerable.
How long such big differences last isn't known (by us), but they are sure to close up when TSB makes its next rate change.
We had wondered whether ANZ was being too aggressive with its rate hikes earlier in the week. But the US Fed and the wholesale money markets have 'justified' their moves that seemed out-sized at the time.
It is easy to see rates across the curve above 6% soon if the market momentum continues. Remember, a year ago, one year fixed rates were at 2.60% at ANZ and two year rates at 2.99% at ANZ. Two years ago the two year rate was 2.69% at ANZ. Borrowers who took out a two year fixed rate two years ago face home loan interest rate that have more than doubled.
And the trend hasn't stopped. We will be watching the data to see if there is a rush to fix at longer terms to "avoid future pain" and "lock in certainty". Certainly three year fixed rates are much more popular now.
On the term deposit side, ASB also raised rates, and have outdone ANZ marginally. ASB's now six month offer is 3.45 (ANZ and Kiwibank are at 3.35%), their new nine month rate is 3.70% (ANZ is 3.65%, Kiwibank 3.55%) and their new one year rate offer is 4.10% matching others.
One useful way to make sense of the 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 September 23, 2022 | % | % | % | % | % | % | % |
| ANZ | 5.50 | 5.45 | 5.65 | 5.75 | 5.95 | 6.85 | 6.95 |
 |
5.50 +0.35 |
5.45 +0.30 |
5.65 +0.30 |
5.75 +0.30 |
5.95 +0.26 |
6.09 +0.30 |
6.09 +0.30 |
 |
4.99 | 5.15 | 5.49 | 5.39 | 5.69 | 5.89 | 5.99 |
 |
5.45 | 4.95 | 5.45 | 5.69 | 5.89 | 5.99 | |
 |
5.35 | 5.45 | 5.55 | 5.65 | 5.65 | 5.75 | 5.75 |
| Bank of China | 4.95 | 5.15 | 5.25 | 5.45 | 5.65 | 5.65 | |
| China Construction Bank | 5.50 | 5.45 | 5.65 | 5.75 | 5.95 | 6.85 | 6.85 |
| Co-operative Bank [*FHB special] | 4.89 | 4.79* | 5.39 | 5.39 | 5.69 | 5.79 | 5.89 |
| Heartland Bank | 4.79 | 5.15 | 5.14 | ||||
| HSBC | 5.29 +0.25 |
5.39 +0.30 |
5.54 +0.35 |
5.59 +0.35 |
5.79 +0.35 |
5.89 +0.25 |
5.99 +0.35 |
| ICBC | 4.99 | 4.95 | 5.15 | 5.25 | 5.69 | 5.89 | 5.99 |
 |
4.95 | 4.89 | 5.35 | 5.29 | 5.49 | 5.79 | 5.79 |
 |
4.89 | 4.69 | 5.19 | 5.29 | 5.55 | 5.65 | 5.65 |
Fixed mortgage rates
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Daily swap rates
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