Heartland Bank raises more home loan rates, whittling back much of its rate advantage. It also unveils a 5% digital call account, besting most other call account offers

Heartland Bank has kicked off the post-election week with some changes that will interest both savers and home loan borrowers.

For savers, Heartland has released a new Digital Saver account, paying 5.00% at call. But it is limited to one free self-service withdrawal per month via the bank's app or digital banking platform. There will be unlimited self-service withdrawals for the rest of 2023, and a promotion "chance to win one of five $5,000 prizes for every $1,000 in their account on 8 December".

The minimum balance required is $1.

At 5.00%, this is the first time in the current rising interest rate cycle an at-call savings account has been this high. Previously it has only been notice saver accounts breaching that level, or Rabobank's PremiumSaver, a bonus saver.

But for home loan borrowers, the Heartland floating rate has been raised by 24 basis points (bps) to 7.99%. Although this is still 65 bps less than main bank floating rates, it comes just days after Heartland raised its reverse mortgage rate to 9.98%, an increase of 23 bps. And there are now other banks with lower floating rates.

Heartland has also raised all its fixed rates by between 20 and 30 bps.

But that still leaves Heartland with market leading offers for 12 and 18 months, even if it now shares that status with two Chinese-owned banks. But Heartland no longer has market-leading rate positions for two or three years fixed.

And for the two market-leading terms, the advantage over the lowest main bank is now down to just 16 bps for a one year term and 20 bps for a two year fixed term.

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. Update: Changes by the Co-operative Bank have been added to this table.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at October 16, 2023	%	%	%	%	%	%	%
ANZ	7.09	7.25	7.04	6.99	6.69	7.09	7.09
	7.45	7.45	7.15	7.05	6.85	6.75	6.69
	7.39	7.19	7.09	6.99	6.69	6.69	6.69
	7.25	7.15		6.99	6.69	6.49	6.49
	7.19	7.25	7.09	6.99	6.69	6.59	6.39
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	6.49	6.40	6.40
Co-operative Bank	7.15 -0.04	7.15 -0.04	7.05	6.99	6.85 +0.16	6.85 +0.16	6.85 +0.16
Heartland Bank		6.99 +0.30	6.89 +0.20	6.85 +0.26	6.65 +0.20
ICBC	7.19	7.05	6.95	6.85	6.59	6.49	6.49
	7.45	7.45	7.15	7.05	6.69	6.69	6.69
	7.19	7.19	7.19	6.99	6.85	6.75	6.69