At the same time ASB offered savers a 6% term deposit rate for one year and 18 month terms, it's also raising fixed home loan rates.
ASB is now the only bank to have a 'special' home loan rate above 7%. That is its highest since October 2009.
There have been a number of recent rises in home loan interest rates, and that has opened up some interesting variances - which will probably be very temporary.
The most obvious differences are with BNZ, which is the remaining main bank with unchanged and lower rates.
For example, the difference between ASB and Kiwibank for a one year home loan rate is now 46 basis points (bps).
Between ASB and BNZ, the two year difference is now 26 bps.
Both are unusual differences between main banks. "Be quick."
Differences to challenger banks, especially Heartland Bank, are even larger.
Banks will point out that wholesale swap rates have been rising globally. However, over the past two weeks or so we have had quite a sharp reversal back down in benchmark wholesale rates.
Obviously you should negotiate and shop around. Most banks will discount their carded rates if you have strong financials. You shouldn't need them but if you are uncomfortable negotiating, a broker can often be helpful. But be aware some brokers won't offer you the best over the whole market, only the banks they have approved connections to in their "lending panel." And clearly bank mobile managers are there to pitch their company's own product.
One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is 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 4, 2023 | % | % | % | % | % | % | % |
| ANZ | 7.09 | 7.25 | 7.04 | 6.99 | 6.69 | 7.09 | 7.09 |
 |
7.45 | 7.45 +0.20 |
7.15 +0.20 |
7.05 +0.16 |
6.85 +0.16 |
6.75 +0.16 |
6.69 +0.20 |
 |
7.39 | 7.19 | 6.95 | 6.79 | 6.49 | 6.49 | 6.49 |
 |
7.15 | 6.99 | 6.89 | 6.69 | 6.49 | 6.49 | |
 |
7.19 | 7.25 | 6.95 | 6.89 | 6.69 | 6.49 | 6.25 |
| Bank of China | 6.99 | 6.89 | 6.79 | 6.59 | 6.39 | 6.29 | |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.45 | 6.40 | 6.40 |
| Co-operative Bank [*FHB special] | 7.09 | 6.89* | 6.95 | 6.79 | 6.49 | 6.49 | 6.49 |
| Heartland Bank | 6.59 | 6.59 | 6.45 | 6.15 | |||
| HSBC | 7.19 | ||||||
| ICBC | 7.19 | 6.95 | 6.85 | 6.65 | 6.49 | 6.49 | 6.49 |
 |
7.39 | 7.25 | 7.04 | 6.89 | 5.99 | 6.59 | 6.69 |
 |
7.19 | 7.19 | 7.04 | 6.89 | 6.69 | 6.59 | 6.49 |
Fixed mortgage rates
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Daily swap rates
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Comprehensive Home Loan Calculator
27 Comments
I have a theory that for the OCR to have any meaningful effect on inflation, the average joe's mortgage rate needs to be pushed above the inflation rate. Otherwise it is more economic to borrow rather than save for your next big expenditure. I have just spent $30k on my house upgrades and it is in a mortgage top up. I'll be paying 6% interest but if I were to save for it like a good little boy, next year the cost will be 8% higher. Better to borrow than save. Mortgage rates are only just now going above inflation so it will be better to save than borrow from henceforth.
For the OCR to have any meaningful effect on inflation, the central bank rate should be above the inflation rate. This used to be known as the Taylor Rule. https://www.investopedia.com/terms/t/taylorsrule.asp
Which would be 7.7% according to GDPLive.
I respectfully disagree 1689. Inflation is measured over a very different basket of goods and there is zero asset inflation.
That $30k you just spent on your house, what’s the bet that would be cheaper next year AND you could have earnt interest in the meantime?
Inflation is measured over consumer goods like broccoli and petrol and you need to be careful how it frames your thinking around assets and capex.
Agree, it's like those that say you're losing having money on term deposit as inflation rate is more.
Was discussing this with one of my normie mates. He said that the ol' rat poison is trading 5% above its inflation adjusted price in December of 2017 (approaching 6 years ago). He said this is good performance using official CPI data.
But he also said that if he took my conspiracy theory mindset - saying that the govt inflation metrics are BS - and real inflation is closer to 10-15% - then it's negative over the same period.
He has good points. But arguably the situation is far worse if it were NZD.
Apologies to all the young recent home buyers who just purchased a home to live in, we overcooked the economy and now you're going to do the heavy lifting for us.
While we could look at other ways to counter inflation, such as universal compulsory Kiwisaver contributions, that sounds like hard work and we prefer the single lever mechanism.. Anyway, you young'ns should have studied macro-economics before taking out a mortgage you can no longer afford, everybody knew interest rates couldn't stay low forever.
We value the contributions your future plane tickets out of here will provide Air NZ's bottom line. Please exit in a calm and orderly fashion so as to not panic the incoming rest-home workers who will be replacing you - who have the good grace to realize their place in this world and recognize paying most of their income to rent our decades old investment property ensures our continued supply of sausage rolls, lattes and e-bikes, is their best way forward in this world.
And if you were stupid and had a family - well, that's on you. Perhaps try a little less hard in your next life.
Ciao.
In can be done in shares, but probably not on the NZX unless you got lucky with A2 Milk or something. The sooner the NZX merges with the ASX the better. Then Kiwi's might have a chance to diversify away from property. Even better, drop the FIF tax on international shares and encourage Kiwi's to go buy US shares. Just think of how much New Zealanders have missed out on by not buying shares like Apple, Google and Microsoft, because the last Labour Govt decided to implement a wealth tax on share portfolios. Then we wonder why everyone buys houses.
Even better, drop the FIF tax on international shares and encourage Kiwi's to go buy US shares.
I respectfully disagree that. We need mum and dad investors money to improve NZ market instead of warming Wall street.
Investing in residential property is bad thing, money leaking's worse though
Golly!
Is this yet more proof - as if any was needed - that the OCR is tired old tool that no longer works the way it was touted too (if indeed it ever really did!)?
Like I've said many times before - If you want to bludgeon inflation into submission and do it quickly and effectively - while making the claim we're all in this together and we're all doing our bit - RAISE TAXES!
At least that way Kiwis keep the money rather than handing it out to the faceless foreigners that fund our borrowing ... and is never seen, nor spent, in NZ ever again.
No, its proof that the Reserve Bank is still refusing to use the OCR as it was designed to be used, because its captured by the political party who appointed the guy in charge. Independence is long gone, now its about not doing anything that might get you fired.
In the meantime we get to enjoy domestic inflation running at 6%+ for almost 2 years now.
Raising taxes won't work, because all that will do is drive people to Australia. Then the entire economy really will crash.
Inflation is falling, and will continue to fall even with the OCR remaining at 5.5%. This is because inflation has many causes which have no relation to the OCR. The Taylor Rule is a concept and not a rule (despite the name) and I doubt that there have been robust studies which have shown its validity in New Zealand.
Its only falling because imported inflation is falling, and that is something that the RBNZ has no control over. That is the US Fed doing its job. They have their OCR at a rate (5.5%) higher than their inflation (3%), and are still saying they will raise the OCR further to bring inflation under 2%.
Meanwhile NZ domestic inflation has only dropped to 6.6% from 6.8% and has been over 6% for almost 2 years now.
This is the strangest comment I've seen on here for quite some time. How will increasing taxes solve this? You need to go back to the drawing board. The main reason we are in this mess is because of the way money is created. New money is created when a loan is taken out and is destroyed when that loan is paid off. When there is more borrowing than saving then we get inflation because there's now more credit in the system than before, chasing a similar number of products and services.
The monetary system is broken beyond repair and requires a ground up rebuild. 97% of money is debt. If we all paid our debts off then the money supply would shrink, and we would get another great depression. But the opposite happens if we all decide to borrow money, like during a real estate bubble. This system has an expiration date.
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