The next bank to trim home loan rates is Westpac. Their adjustments take them into line with their main rivals. But they did make a +10 bps rise to their six month term deposit rate to a somewhat unique level

The next bank to trim home loan rates is Westpac, the first of the big Aussie-owned banks in 2024.

But it is not an especially notable reduction because it just aligns them with its main rivals, and in fact probably only recognises what they were already doing, matching those rivals.

At the same time they trimmed some term deposit rates, taking -10 bps off their eight, twelve and eighteen month rates and -20 bps off their two year rate. This essentially flattens their offers around 6%.

But they have added +10 bps to their six month offer, taking that up to 6.10%. At that level, this is the best (highest) from any main bank for a six month term, and better than or matching a number of challenger banks. Only Rabobank has a higher six month TD offer, at 6.15% pa.

These changes come after Kiwibank, TSB and the Co-operative Bank have all made new years adjustments, also mostly trimmings. No one else raised their six month TD rate.

The main banks are going to have to be careful with their rate setting. All of them essentially having the same rate for the key competitive mortgage terms (1-2 years) has the look of de facto collusion, even if no actual behind-the-scenes collusion is taking place. No doubt the Commerce Commission will be looking at how they all respond in unison, and that will be part of the Commission's Market Study currently underway. The optics are bad.

Obviously you should negotiate and shop around. Most banks will discount their carded home loan 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.

They may even offer savers higher than carded rate offers.

Challenger banks usually offer better rates - although not always mainly because most lack ready access to wholesale markets.

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. They will become important in a falling market however.

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 January 18, 2024	%	%	%	%	%	%	%
ANZ	7.35	7.39	7.15	6.89	6.75	7.34	7.34
	7.45	7.45	7.15	6.89	6.75	6.75	6.75
	7.39	7.35	7.15	6.89	6.79	6.75	6.75
	7.39	7.35		6.89	6.75	6.69	6.59
	7.39	7.39	7.15 -0.04	6.89 -0.10	6.75	6.69	6.49
Bank of China		7.09	6.99	6.89	6.79	6.69	6.59
China Construction Bank	7.19	7.09	6.89	6.75	6.49	6.40	6.40
Co-operative Bank	7.39	7.35	7.15	7.05	6.75	6.75	6.75
Heartland Bank		6.99	6.89	6.85	6.65
ICBC	7.19	7.05	6.95	6.85	6.59	6.49	6.49
	7.55	7.55	7.25	7.15	6.79	6.79	6.79
	7.39	7.39	7.19	6.89	6.75	6.79	6.79