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Kiwibank has cut its one, two, and three year fixed mortgage rates by about 0.10% each, basically matching the best rate in the market for these terms.

Its one year rate is now 6.15%, matching The National Bank, which previously had the lowest rate of any bank. Southern Cross Building Society has a one year rate of 6.10%.

Kiwibank’s two year rate is now 7.10%, beaten by TSB Bank on 7.09%.

Its three year rate is 7.70%, which makes it as low as ASB’s offer, and beaten only by HSBC’s 7.69%.

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ANZ has lowered its 3, 4, and 5 year fixed mortgage rates, with a new rate offering below every other main bank, and only beaten by HSBC’s 5 year rate. (Updated with the National Bank rate changes, detail on variable rates)

The new ANZ rate for 3 year fixed is 7.75%. For four years fixed their rate is 8.19%, and for 5 years fixed it is 8.49%. (HSBC’s Premier 5 year rate is 7.99% but there is a high threshhold to qualify for that offer.) However, these rates remain well above ANZ’s simple variable rate on 5.69%, which is different from previous years where fixed rates have often been below variable rates.

This rate change moves ANZ from among those banks that offer the highest rates at these terms, to the leading position.

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Kiwibank has reduced its four and five year fixed mortgage rates by 29 bps and 19 bps respectively, effective immediately.

This move is the first by another bank to respond to rate reductions by ASB late last week, and these Kiwibank reductions match the ASB rates for these terms. Both banks have opened up about a 0.25% advantage over other banks for longer term rates.

ASB’s earlier moves down for shorter term fixed mortgage rates matched Kiwibank and the rest of the market.

With a growing realisation in moneymarkets that official rates will be lower-for-longer, both here and in Europe / USA, wholesale swaps have been trending lower as are the 90 day bank bills. This is opening up some margin that can be used to compete for mortgage market share.

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ASB and Bank Direct have lowered key fixed mortgage rates, bringing their five year rate down to the lowest level of any of the main banks.

Their new five year rate is now 8.50%, down 0.25%.

This gives them at least a 0.10% advantage over The National Bank, the closest other main bank. Westpac and ANZ are still at 8.65%, and BNZ is at 8.75% for a fixed five year term.

Only HSBC has a lower 5 year rate. at 7.99% for their Premier offer, which has specific conditions that apply. Kiwibank is at 8.69%, TSB is at 8.65, and SBS Bank is at 8.75%

ASB also lowered its 4 year rate to 8.20%, also the best 4 year rate by a bank.

Its one year fixed rate fell to 6.25%, bringing it in line with most other banks.

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State-owned Kiwibank has cut its variable mortgage rate by 14 basis points (bps) to 5.65%, making it the second lowest bank variable rate behind BNZ’s headline Total Money rate of 5.59%.

At the same time, Kiwibank hiked its 18 month mortgage rate by 10 bps to 6.49%. See and compare all mortgage rates here.

While fixed mortgage rates have been rising in recent weeks, variable rates have remained stationary at the low end of the mortgage rate curve. Kiwibank is the first bank to change its variable rate this year.

Variable rates are likely to remain at their lows until the Reserve Bank of New Zealand (RBNZ) decides to start increasing the Official Cash Rate (OCR) off its record low of 2.5% later this year. RBNZ governor Alan Bollard said on TVNZ’s Sunday Q&A that the bank was sticking with its expectation that it would raise the OCR around the middle of the year.

Many home owners are now opting for variable mortgage rates rather than fixed rates. For more, see here.

SBS Bank has raised its one year mortgage rate from 6.25% to 6.35%, and its two year rate from 7.25% to 7.30%. The move follows Westpac, which raised its one year rate to 6.29% earlier in the week.

See and compare all mortgage rates here.

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