First ANZ, and now Westpac have moved home loan rates. ANZ raised its floating rate by +40 bps yesterday to 8.39%, effective April 27. Today Westpac also raised theirs by +40 bps to 8.39%, effective May 1.
But while ANZ raised its fixed rates for all terms to two years, and Westpac essentially followed that, Westpac has taken the axe to all its fixed rate for three years and longer, chopping them to 5.99%.
For those longer terms, that gives Westpac a big rate advantage. For three years, their rate is now -60 bps lower than ANZ's carded offer.* (Although in this tight market, it is almost certain ANZ will match Westpac, despite the huge difference).
Against ASB, Westpac is -60 bps lower at the three year fixed rate card point. Ditto BNZ. Against Kiwibank, the carded difference is -80 bps to Westpac's advantage.
For challenger banks, Westpac's 3+ year rate moves put them all in a tougher spot. Only Heartland Bank has a lower three year fixed rates.
And of course we should point out that Westpac's 5.99% rate point is lower than any of their shorter term fixed rates (and of course -240 bps less than their floating rate).
Westpac has also raised term deposit rates for all terms one month to 18 months by between +10 bps and +30 bps. But they cut TD rates by -10 bps for terms three, four, and five years. They also raised their bonus saver account rate by +50 bps to 4.25%, and the Notice Saver account rate to 4.50%.
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.
[* An earlier version incorrectly compared the Westpac 'special' rate to ANZ's standard rate. This has now been corrected so the comparison is between 'special' rates only.]
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 April 13, 2023 | % | % | % | % | % | % | % |
| ANZ | 6.79 +0.19 |
6.74 +0.20 |
6.69 +0.20 |
6.59 +0.14 |
6.59 | 7.19 | 7.09 |
 |
6.64 | 6.64 | 6.64 | 6.59 | 6.59 | 6.49 | 6.49 |
 |
6.54 | 6.54 | 6.49 | 6.45 | 6.59 | 6.59 | 6.59 |
 |
6.50 | 6.49 | 6.49 | 6.79 | 6.79 | 6.79 | |
 |
6.89 +0.30 |
6.79 +0.20 |
6.69 +0.10 |
6.59 +0.05 |
5.99 -0.60 |
5.99 -0.60 |
5.99 -0.50 |
| Bank of China | 6.39 | 6.35 | 6.29 | 6.49 | 6.49 | 6.49 | |
| China Construction Bank | 6.60 | 6.54 | 6.49 | 6.45 | 6.40 | 6.40 | 6.40 |
| Co-operative Bank [*FHB special] | 6.35 | 6.25* | 6.35 | 6.35 | 6.49 | 6.59 | 6.59 |
| Heartland Bank | 6.14 | 6.15 | 5.99 | 5.95 | |||
| HSBC | 6.44 | 6.39 | 6.44 | 6.49 | 6.59 | 6.65 | 6.69 |
| ICBC | 6.45 | 6.39 | 6.29 | 6.29 | 6.59 | 6.59 | 6.59 |
 |
6.59 | 6.59 | 6.64 | 6.59 | 6.59 | 6.65 | 6.69 |
 |
6.54 | 6.54 | 6.49 | 6.49 | 6.59 | 6.59 | 6.49 |
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35 Comments
Wait for the CPI & PPI & GDP figures. ... Isn't it about time we had these figures monthly? Everyone is flying blind without monthly figures!
If the Shock and Orr team want to keep their jobs the OCR must be falling come the election. (While Robertson may be okay with the current team - Many others are absolutely furious with them and want them gone by lunch. Myself included.)
I would like to give some advice to those who have to renew their mortgages soon and may not be familiar with how interest rates work. DO NOT BE TEMPTED TO FIX LONG BECAUSE OF THE LOWER RATE. A rate inversion (longer term interest rates, 5 year at 5.99% being lower than shorter term rates 1 year at 6.89% Westpac), is a clear sign that interest rates are on their way down. Not immediately, but within a year. Also if you fix for 5 years and rates drop, or you have to sell and repay the mortgage early, you will be liable to pay hefty penalties.
There's a big difference between a 3 & 5 yr fix though... 5.99 at 3yrs if you are hard up is relatively attractive given 2 yr is a very standard fix and the length of time things could play out. Election run up going to be happening very soon (US) which is when the labor market is most heavily assisted by the incumbent govt. Likely adding more fuel to the fire and dragging the inflation fight out.
Seems like Westpac are actively discouraging borrowers from it's shorter term fixed rates. They would only do this if they see interest rates dropping in the near future.
Perhaps trying to lock in customers at what would be higher than floating rates.
Or perhaps they are making it look like rates will drop, when actually they will continue to rise and being on a lower rate longer term would be better.
Who knows?
Seems to me that anyone re-fixing over the next 3 ~ 6 months is really just gonna have to focus on what they can afford.
Possibly hedge bets by fixing different portions of your mortgage at different rates, and leave a little bit on floating?
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