Kiwibank offers its lowest ever home loan rate

Kiwibank offers 4.79% fixed-term, six-month mortgage rate, claims 'the lowest rate offered by any bank for many decades'

Property

Kiwibank offers 4.79% fixed-term, six-month mortgage rate, claims 'the lowest rate offered by any bank for many decades'

14th Feb 13, 2:17pm by Gareth Vaughan

Kiwibank has launched a "limited time special" six-month, fixed-term home loan interest rate of 4.79%, which is the lowest advertised, or carded, rate the bank has offered in its 11-year history.

The rate shaves 46 basis points off Kiwibank's previous six-month rate and is the lowest advertised rate for a six-month time period advertised by a bank.

The next lowest six-month rate on offer is SBS Bank's 5.10%.

See all advertised bank home loan rates here.

"It is a very competitive home loan market at the moment and the Kiwibank offer may well be the lowest rate offered by any bank for many decades," Kiwibank CEO Paul Brock said.

The offer isn't restricted to new customers, has no minimum lending requirement and no debt/equity restrictions.

It's the second aggressive mortgage move by a major bank so far this week after Westpac launched market leading one, three and five-year fixed-term mortgage rates on Monday.

The Westpac rates, however, are aimed at winning customers' off other banks, require borrowers to have a deposit of at least 20%, and to take out new lending of at least NZ$100,000.

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Source: interest.co.nz

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12 Comments

by andyh | 14th Feb 13, 2:31pm 1360805518

More fuel for the housing boom.

Wheeler asleep at the wheel just as his predecessor was in the early/mid 2000s. If he were a soldier he would be shot for dereliction of duty.

Plus ça change, plus c'est la même chose.

by StanGoodvibes | 14th Feb 13, 2:36pm 1360805760

a "limited time special"

Kiwibank finally breaks the psychological 4.99% (basically 5%) barrier. Expect other banks to follow suit and chart a path down. Expect limited time to become long time.

by ITYS | 14th Feb 13, 3:07pm 1360807671

But.. but.. but.. all comentators (including many on this site - Roger Kerr, I'm looking at you buddy) said that rates were going up. n'est ce pas?

by Father Ted | 14th Feb 13, 6:23pm 1360819426

I think Roger is generally correct.

If you look at where swap rates are today, they are about the same level as 10 months ago. The 3 year swap rate is up about 0.40% since November. Look at where fixed mortgage rates were 10 months ago - much, much higher than today.

This means banks are taking a margin hit. Not sure the banks will be very happy about that. I reckon this could be a very short price war, or something else has to give.

by midgetkiwi | 15th Feb 13, 9:15am 1360872921

"This means banks are taking a margin hit. Not sure the banks will be very happy about that."

Haha what margin hit? You mean margin on creating new money out of thin air everytime a loan is taken out? I am fairly sure the banks are still pretty happy about their liscence to print and create most of our currency floating around

by bigblue | 14th Feb 13, 3:08pm 1360807689

Other banks will negotiate lower than that - you only have to ask! Will we see 3.99% later in the year?

by speckles | 14th Feb 13, 3:29pm 1360808982

I have seen that same rate offered over a longer term this week by a bank.

by speckles | 15th Feb 13, 9:05am 1360872321

Correction, looked this morning when in the office, the lowest rate was 4.75% for one year fixed.

So 4.75 - 5.6% spread, this is the market currently what has been offered this week....

Interesting thing is it comes with the clients having to sign a confidentiality agreement with the bank documents :-)

Don't know if that would stand up, assume it is to give that bank a jump on others. At best,,possibly delay the word so to speak.

I'm constantly amused by the OCR debate here, I believe it is entirely driven by bank margins, which on balance, are not materially effected by the OCR.

Its a simple trade off for the banks, margin vs market share..with the constant jostling on a quarterly basis to reflect decent numbers and growth where possible with the system.

One month a bank will discount heavly from their carded rates, the next not interested except for the small .25-.3 discount to make you feel they have moved...

by speckles | 15th Feb 13, 11:12am 1360879939

I said the spread above the three year rate is around 5% fixed, floating 5.1-5.25 range.

The card rates are a play for conservative NZs who just take the price...very nice :-)

by Freddie B | 15th Feb 13, 12:09pm 1360883351

5.0% fixed 3-years & 5.6% fixed for 5-years? Do tell where and how?

by M.Coulston | 14th Feb 13, 5:19pm 1360815588

cool, now we can go price match with other banks, driving prices even lower

here you go housing boom, have some delicious petrol on your fire

at least the labour department will keep busy

by Exponential Naivety | 15th Feb 13, 10:28am 1360877304

'Plus ça change, plus c'est la même chose' - .......Ca c'est tout a fait la verite chere ami...tristement!

The appearance of change is often nothing but the repetition of somebody else's mistakes at some point further down the time line...

History is both facinating - when it remains in the past - and fear rendering (when it raises its ugly head again)!