More banks have pushed through mortgage rate increases to their fixed rates just before the Christmas holiday break.
ASB and cousin Sovereign have withdrawn their low LVR 'specials' and raised their standard rates.
ASB's new rates closely mimic the ANZ rates announced earlier in the week
Kiwibank has raised its one and two year rates, and increased its 2 year <80% 'special'.
Kiwibank has also raised some term deposit rates today.
The Cooperative Bank has also raised home loan rates for fixed terms of one to four years.
Because BNZ, SBS and TSB have yet to follow the herd, the gap between the lowest and highest one year home loan offers remains at 54 bps, the gap at 2 years is 84 bps, and the gap at five years is 65 bps.
However, the fact is that the move higher by most banks means it will be more difficult to negotiate extra rate reductions at the low-card banks - they are now offering a significant rate advantage at card.
Premium sweeteners may also be harders to win.
Wholesale swap rates are now back to levels last seen in July 2011. (Back then, one year fixed rates were 5.95%, two year rates were 6.45% and five year rates were 7.70%.)
However, in July 2011 wholesale rates were falling; they are now rising, and rising quite quickly.
Not only has the RBNZ clearly signaled that their policy rates will be going up in 2014, markets are believing them this time. As much as +1.25% is being factored in for 2014 rises.
Even more importantly, international bond rates are rising. Benchmark UST 10 yr yields are now up to almost 2.90%.
Countering the rising cost base, corporate CDS spreads are narrowing which will take some of the bite out of the upward pressure. These are also back to levels seen in early-mid 2011.
See all carded, or advertised, bank home loan rates here.
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.49% | 5.85% | 6.29% | 6.65% | 7.20% |
 |
5.49% | 5.85% | 6.29% | 6.60% | 7.20% |
| BNZ | 4.95% | 5.80% | 5.95% | 5.99% | 6.99% |
| Kiwibank | 5.45% | 5.95% | 6.40% | 6.90% | |
 |
5.49% | 5.85% | 6.29% | 6.65% | 7.20% |
| Co-op Bank | 5.19% | 5.85% | 6.25% | ||
 |
5.10% | 5.65% | 6.35% | 6.99% | |
| SBS / HBS | 5.20% | 5.45% | 5.45% | 5.99% | 6.55% |
| TSB | 4.95% | 5.40% | 5.85% | 5.99% | 7.00% |
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4 Comments
Did anyone else notice how Westpac slipped in a very quiet cut to their savings accounts rate yesterday?
How can they be putting down savings account rates when wholesale rates are rising and some other major banks are lifting their TD rates?
Perhaps interest.co.nz could ask Westpac the question.
Merry Christmas Westpac savings account holders!
All RBs in effect have had the same "education" They are invariably made up of fresh water school economists and hawkish to boot, so of course they all want to put the OCRs up.
So far though Dr Wheeler seems more awake.
regards
PS though his last talk seemed to suggest a very clear 25 basis point rise soon.
ZZ - it must be Christmas, we're agreeing on something, be it that you always paint it more sinister that I do with regards banks. It's obviously the case with Westpac, they're getting some of their margins back, as any business is entitled to, their risk is whether the market (borrowers and investors) will let them. If I do the simple maths, they've had a short term compression of margins that can only be for market share reasons (that at least one innocent on here described excitably as a "cut"), and now they're taking it back - they're not dumb, if they're doing so they know the impact to their business, and they're comfortable with that, let's face it they've had 100 years plus of operating here.
The more important question is whether it's a cartel, whether the 6-10 main banks (say compared with two airlines) are a cartel. Whether 6-10 main banks (including the so called patriotic NZ banks of Kiwi, PSIS, TSB and SBS - how many do we need until we accept that every business will price to where the market is and that banking isn't something special?) that will drop their draws if you walk in the doors and want to negotiate.
I say again, check out NZ banks cost of funds, work out their margins, then check various other offshore banks cost of funds, work out their margins, then pass "cartel" comments based upon an informed rather than populist position.
ZZ- have great Christmas, I enjoy the debate, and do appreciate some of your informed postings in other areas where I have less experience.
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