Thursday edition of the great fixed mortgage rate rise (TSB, Kiwibank, BNZ, CBS, AMP hike too) (Update 3)
13th Aug 09, 11:06am
Thursday has seen a number of mortgage rate changes and we will update this page through the day as more come through. (Update 3 with TSB two year rate rise.) TSB announced it would raise its two year fixed mortgage rate on Friday by 20 basis points to 6.19%. Despite the rise, the rate will still be the lowest two year rate offered by a bank in New Zealand. Kiwibank has followed BNZ in cutting its variable mortgage rates while raising fixed rates on Thursday morning. Kiwibank is the last of the regular banks to move in this latest round of fixed rate rises. BNZ and Kiwibank are the only two banks to have lowered their variable rates in the latest round of changes, and this may well put pressure on other banks to revise their previous moves. Pressure has been placed on the banks by the Reserve Bank and politicians recently to lower their variable mortgage rates. Kiwibank lowered its standard variable rate by 20 basis points (bps) to 5.79% following BNZ's surprise move to lower its TotalMoney variable rate to 5.85%. Meanwhile, Kiwibank raised its two to five year fixed rates by 30 to 55 bps. Six month and one year rates were unchanged. Kiwibank's new variable rate looks as if it is the lowest variable rate that has been offered by a bank in New Zealand in more than 40 years, going by RBNZ figures. Kiwibank Acting Chief Executive Paul Brock said recent comments by the Reserve Bank Governor that the Official Cash Rate is likely to stay at its current level or lower for some time gave it confidence to again cut rates. "The wholesale markets and deposit rates being offered by banks clearly indicate that in the longer term, rates will rise. But for now we see the opportunity to pass through additional savings on variable rates for our customers," Brock said. "This gives those home owners with fixed term rates coming due for renewal the opportunity to grab our very competitive variable and short term rates while they consider their options," he said. "We think that financial commentators will agree that a variable rate of 5.79% is startlingly good value." Brock noted that customers didn't have to "jump a whole lot of hurdles" to be eligible for Kiwibank's new variable rate, saying it wasn't a special deal and was just a regular rate. "We always want to be the best value among the Aussie banks and we've consistently been there," he said. BNZ followed other banks in raising fixed mortgage rates by between 30 and 46 bps, but in a surprise move cut its variable rate, putting pressure on state-owned Kiwibank. BNZ's 'TotalMoney' variable rate is now 5.85%, which was briefly below Kiwibank's previous market-leading rate among banks of 5.99%. However, there are a number of requirements as a borrower must follow to be eligible for BNZ's rate Any BNZ customer applying for such a loan must set up a 'TotalMoney' account, which can be used to link with other family accounts to offset mortgage interest with savings interest. BNZ's new standard variable rate is 6.30%, still above standard variable rates offered by Kiwibank and Bank Direct, but down from 6.45% previously. BNZ raised its 18 month and two three to seven year fixed mortgage rates. AMP Home Loans has also raised two to five year fixed rates by 25 to 46 bps. AMP Home loans' rates are set by Kiwibank, with the state-owned bank's rates typically, but not always, following close behind. CBS Canterbury also announced fixed mortgage rate changes this morning, raising its three and five year rates by 20 and 15 bps, respectively. Bernard Hickey has updated his Brother in Law's Guide to mortgage rates. See and compare all NZ mortgage rates on our mortgage rates page.