Westpac slices 3 year+ fixed mortgage rates

Personal Finance / analysis

First ANZ and now Westpac have moved up on many home loan rates following the OCR hike - but Westpac has cut some longer fixed rates, and quite hard

[updated]

13th Apr 23, 4:27pm by David Chaston

First ANZ, and now Westpac have moved home loan rates. ANZ raised its floating rate by +40 bps yesterday to 8.39%, effective April 27. Today Westpac also raised theirs by +40 bps to 8.39%, effective May 1.

But while ANZ raised its fixed rates for all terms to two years, and Westpac essentially followed that, Westpac has taken the axe to all its fixed rate for three years and longer, chopping them to 5.99%.

For those longer terms, that gives Westpac a big rate advantage. For three years, their rate is now -60 bps lower than ANZ's carded offer.* (Although in this tight market, it is almost certain ANZ will match Westpac, despite the huge difference).

Against ASB, Westpac is -60 bps lower at the three year fixed rate card point. Ditto BNZ. Against Kiwibank, the carded difference is -80 bps to Westpac's advantage.

For challenger banks, Westpac's 3+ year rate moves put them all in a tougher spot. Only Heartland Bank has a lower three year fixed rates.

And of course we should point out that Westpac's 5.99% rate point is lower than any of their shorter term fixed rates (and of course -240 bps less than their floating rate).

Westpac has also raised term deposit rates for all terms one month to 18 months by between +10 bps and +30 bps. But they cut TD rates by -10 bps for terms three, four, and five years. They also raised their bonus saver account rate by +50 bps to 4.25%, and the Notice Saver account rate to 4.50%.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is also 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.

[* An earlier version incorrectly compared the Westpac 'special' rate to ANZ's standard rate. This has now been corrected so the comparison is between 'special' rates only.]

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 April 13, 2023	%	%	%	%	%	%	%

ANZ	6.79 +0.19	6.74 +0.20	6.69 +0.20	6.59 +0.14	6.59	7.19	7.09
	6.64	6.64	6.64	6.59	6.59	6.49	6.49
	6.54	6.54	6.49	6.45	6.59	6.59	6.59
	6.50	6.49		6.49	6.79	6.79	6.79
	6.89 +0.30	6.79 +0.20	6.69 +0.10	6.59 +0.05	5.99 -0.60	5.99 -0.60	5.99 -0.50

Bank of China		6.39	6.35	6.29	6.49	6.49	6.49
China Construction Bank	6.60	6.54	6.49	6.45	6.40	6.40	6.40
Co-operative Bank [*FHB special]	6.35	6.25*	6.35	6.35	6.49	6.59	6.59
Heartland Bank		6.14	6.15	5.99	5.95
HSBC	6.44	6.39	6.44	6.49	6.59	6.65	6.69
ICBC	6.45	6.39	6.29	6.29	6.59	6.59	6.59
	6.59	6.59	6.64	6.59	6.59	6.65	6.69
	6.54	6.54	6.49	6.49	6.59	6.59	6.49

Fixed mortgage rates

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Source: interest.co.nz

Source:

Daily swap rates

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Source: NZFMA

Comprehensive Mortgage Calculator

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35 Comments

by Snow | 13th Apr 23, 4:43pm 1681360999

For whatever reason Westpacs figures in the charts never show the actual rate when there’s been a change. Just the amount of bp the rate has changed. Not sure if that’s the same for other readers?

by realterms | 13th Apr 23, 7:17pm 1681370269

Ad blockers used to mess with the table for me.

by JimboJones | 13th Apr 23, 7:20pm 1681370408

Looks fine to me. Maybe your current bank has installed a malware to parent you seeing other rates!

by pankers | 13th Apr 23, 5:10pm 1681362611

Rabobank has just up term deposits 5.90 for 9 months

by Jean Valjean | 13th Apr 23, 5:35pm 1681364126

The drop off in mortgage lending is hurting the banks?

Game plan: cover the OCR rises at short term lending; try and win business (sharper/lower margins) at medium term fixes?

It's great to see them actually competing!

by OldSkoolEconomics | 13th Apr 23, 6:25pm 1681367107

Genius. Rbnz will simply up the OCR to compensate.

by ChrisOfNoFame | 14th Apr 23, 10:30am 1681425033

Oligopolies don't really compete although they often pretend too.

We'll only see real competition only when we get a sizable mutual (not-for-profit) bank - or two - up and operational in NZ.

by Justa comment | 13th Apr 23, 5:56pm 1681365408

When the 5yr eases to 5.5% for 5 years it will be a tempting out for some to avoid 6.7%. We could see this in 4 or 5 months.

by JimboJones | 13th Apr 23, 6:19pm 1681366785

I’d still go the 6 month or maybe a year.

by Audaxes | 13th Apr 23, 6:22pm 1681366961

Don’t Fight the Fed?

by marewa | 13th Apr 23, 8:35pm 1681374937

A Reserve Currency privilege, which works until it doesn't.

I worry that they fought the Fed and the Fed won is not the way this is going to work out.

by Mr Frank | 13th Apr 23, 6:47pm 1681368476

I doubt Orr will be pleased. 100 point rise in 2023 has inly resulted in about a 25 point rise to fixed rates.

He's gonna go another 50 in May?!

by Juzz | 13th Apr 23, 6:59pm 1681369141

At the very least

by ChrisOfNoFame | 14th Apr 23, 10:36am 1681425401

Wait for the CPI & PPI & GDP figures. ... Isn't it about time we had these figures monthly? Everyone is flying blind without monthly figures!

If the Shock and Orr team want to keep their jobs the OCR must be falling come the election. (While Robertson may be okay with the current team - Many others are absolutely furious with them and want them gone by lunch. Myself included.)

by Nzdano | 13th Apr 23, 6:49pm 1681368565

It's a trap.

The worst possible time to go long on fixed rates is when they're lower than shorter terms.

by Mr Frank | 13th Apr 23, 6:56pm 1681369014

You mean better to go long when they lower the shorter terms?

by JimboJones | 13th Apr 23, 7:18pm 1681370325

It’s pretty rare that you are better off going long. Unless you are a porn star or something.

by Justa comment | 13th Apr 23, 7:26pm 1681370782

Long was good 14 months ago, 5 yr mortgage at 2.99% (many passed this up thinking 2.5% would last forever. I thought it was a gift at the time.

by JimboJones | 13th Apr 23, 7:32pm 1681371178

Yes that was one of those rare moments. Probably the first in 15 years.

by Hummy | 13th Apr 23, 7:52pm 1681372330

Did do same, bank manager called me madman. But i believe 2012 i locked in a rate when reserve bank was signaling a rate rise. And then they started to go opposite direction.

by Small Kev | 13th Apr 23, 7:29pm 1681370997

When something is not selling discount the price. Mortgage included.

by nktokyo | 13th Apr 23, 8:40pm 1681375214

Went for a walk around a mall today. Crickets...

by JimboJones | 13th Apr 23, 9:15pm 1681377314

Better raise that OCR some more to stop people spending money…

by nktokyo | 14th Apr 23, 6:07am 1681409256

The cricketers are indeed inflationary

by ChrisOfNoFame | 14th Apr 23, 10:39am 1681425598

Many already wealthy people are enjoying the high rates on their deposits and continue to spend like there's nothing going on. Hint: By wealthy, I mean older.

by Pa1nter | 14th Apr 23, 4:46am 1681404365

I'd suggest going for a walk in a meadow instead.

Still crickets, but without all the vapid consumerism.

by HW2 | 14th Apr 23, 7:17am 1681413450

You are up and about rather early Mr p

by Pa1nter | 14th Apr 23, 8:19am 1681417164

5am is a productive time for any good boy or girl to be up and about.

That said I'm not in the same timezone.

by HW2 | 14th Apr 23, 11:04am 1681427040

Awesome. Enjoy

by cornercafe | 13th Apr 23, 10:57pm 1681383452

It starts off in games but ends up in tears.

by Sibrit | 14th Apr 23, 10:22am 1681424523

If we can have 10-year daily swap rates, why can't the banks offer 10-year fixed rates?

by Yvil | 14th Apr 23, 12:10pm 1681431013

I would like to give some advice to those who have to renew their mortgages soon and may not be familiar with how interest rates work. DO NOT BE TEMPTED TO FIX LONG BECAUSE OF THE LOWER RATE. A rate inversion (longer term interest rates, 5 year at 5.99% being lower than shorter term rates 1 year at 6.89% Westpac), is a clear sign that interest rates are on their way down. Not immediately, but within a year. Also if you fix for 5 years and rates drop, or you have to sell and repay the mortgage early, you will be liable to pay hefty penalties.

by Justa comment | 14th Apr 23, 12:48pm 1681433317

Unless you have to to save your house if you cant pay 7%...............

by titans1350 | 14th Apr 23, 12:51pm 1681433472

There's a big difference between a 3 & 5 yr fix though... 5.99 at 3yrs if you are hard up is relatively attractive given 2 yr is a very standard fix and the length of time things could play out. Election run up going to be happening very soon (US) which is when the labor market is most heavily assisted by the incumbent govt. Likely adding more fuel to the fire and dragging the inflation fight out.

by Sibrit | 14th Apr 23, 1:56pm 1681437412

Seems like Westpac are actively discouraging borrowers from it's shorter term fixed rates. They would only do this if they see interest rates dropping in the near future.

Perhaps trying to lock in customers at what would be higher than floating rates.

Or perhaps they are making it look like rates will drop, when actually they will continue to rise and being on a lower rate longer term would be better.

Who knows?

Seems to me that anyone re-fixing over the next 3 ~ 6 months is really just gonna have to focus on what they can afford.

Possibly hedge bets by fixing different portions of your mortgage at different rates, and leave a little bit on floating?