The ANZ and National banks have cut one year, 18 month, two year and three year fixed-term interest rates following falls in wholesale interest rates and forecasts the Reserve Bank will cut the Official Cash Rate (OCR) following last week's devastating Christchurch earthquake.
However they left their floating rates on hold.
This afternoon ASB and Westpac followed this morning's moves by the sister banks with its own broader mortgage rate cuts. ASB said it was monitoring its floating more
The moves opens a new front in competition between the banks for dwindling demand for home loans. It also reverses the relationship between fixed and floating rates, taking ANZ, National, Westpac and ASB's fixed rates below their floating rates.
ANZ and National Bank cut their one-year fixed term home loans by 50 basis points to 5.95%. See all advertised mortgage rates here.
ASB followed the ANZ and National moves this afternoon, saying it was cutting all fixed-term mortgage rates from six months to five years from tomorrow, March 2. It cut its one year rate by 50 basis points to 5.95%, matching ANZ and National. See all ASB's changes to mortgage and term deposit rates here.
ANZ and National also cut their 18 month fixed rate by 26 basis points to 6.29%, their two year fixed rate by 16 basis points to 6.49% and three year home loan rate by 11 basis points to 6.99%.
The ANZ and National mortgage rate cuts come after parent ANZ New Zealand recorded housing term lending growth of just NZ$6 million to NZ$53.89 billion in the three months to December.
“Wholesale interest rates have recorded decreases across all terms,” the two banks said in statements.
“In addition markets are now forecasting a drop in the OCR, leading to lower interest rates generally. In response to lower wholesale rates, we are today announcing drops in our fixed rate home loan and term deposit rates.”
ASB also said its mortgage rate cuts reflected changing wholesale funding rates and market forecasts that the Reserve Bank is likely to lower the Official Cash Rate from 3% next week.
"With wholesale call and 90 day rates reflecting little change at present we will continue to monitor our variable home loan interest rate leading up to the OCR announcement next week," ASB added. "ASB’s Term Deposit rates have also been reduced to reflect the changes in wholesale rates."
The 90 day bill rate has fallen 33 bps to 2.86% this week, while the one year swap rate has fallen 40 bps to 2.97%.
ASB is dropping its six month fixed rate by 50 basis points to 5.85%, 18 month rate by 35 basis points to 6.2%, two-year fixed rate by 20 basis points to 6.4%, three year by 20 basis points to 6.9%, four year by 15 basis points to 7.3% and five year by 15 basis points to 7.6%.
On the term deposit front, the ANZ cut its five month term deposit rate by 50 basis points to 4.5%, their six month rate by 25 basis points to 4.25%, their nine month rate by 40 basis points to 4.6%, one year rate by 50 basis points to 4.6%, 18 month rate by 60 basis points to 4.8% and two year by 50 basis points to 5%.
National Bank cut its five month term deposit rate by 25 basis points to 4.25%, six month rate by 50 basis points to 4.5%, nine month by 40 basis points to 4.6%, one year by 50 basis points to 4.6%, 18 month by 60 basis points to 4.8% and two year by 50 basis points to 5%. See all term deposit rates for up to nine months here and see all term deposit rates for one to five years here.
(Updated with ASB's moves and interactive chart below of wholesale swap rates and background, Westpac's moves).
No chart with that title exists.
18 Comments
That's the trouble with running a system that depends on continuing to lend created credit into an already debt bloated unbalanced economic turd....so here we go again with some fresh bait on the banking hook and let's see how many idiots "take the bait".
Consider for a second what will happen ...when the ANZ and National mortgage lending total of NZ$53.89 billion...starts to fall....into the 40s and then lower still into the 30s.....as peasants crank up the clearing of their mortgage debts....
Oh bugger.....fewer want to go into a debt for a lifetime and more are escaping their mortgage death trap every week.....property values falling and banking balance sheets running red.
Consider what will happen to savers when Banks no longer need their hard earned savings as everyone retired debt?
Consider for a second what will happen..... when Banks offer rates of 1% to 2% for term deposits and nothing on savings accounts?
What you going to do? Look up "Finance Company" in the Yellow Pages?
We must be approaching that tipping point where no one will borrow at such low rates, as it's too obvious that rates will have to rise up again at some point, and cost the new borrowers too much to hold on to their new house. Only when the actual cost of the house has fallen enough to borrow at the low rates ( enough cusion in the higher % rates to finance a lower purchase) will real borrowing restart. The closer a hunter gets to a bear trap, the slower he moves - The lower these rates go, the less people will borrow.
Nope.....I overheard on the public transport today ppl talking about a house they loved and just had to buy it....the cost was OTT IMHO by the sound of it but they were trying to figure out how to get to the asking price as she just had to have it.........30 year mortgage etc...Im thinking OMG.....road kill....
regards
yep - road kill is right.
The media has to shoulder a large part of the blame for those folk countinuing in ignorance, though.
See John Armstrong's casual acceptance of 'economic growth' as a 'given' in the weekend, Brent Edwards on RNZ ditto. Maybe they're political rather than business, but truth - ie fact - should be their aim. They're a long way adrift.
I remember Jooanne Black saying "I think the trouble is that there are too many people on the planet".
"Good on yer, Joanne" I hollered at the speaker, then she misses the point, loses the plot, and goes back to discussing deckchairs.
Why didn't she remember her Form 2 maths? Turn it upside down: What is too many people on a finite sphere? It's too few resources per head - or it wasn't an issue. Then she raves on about her new house do-up, presumably mortgaged (levered against the need for an exponentially-increasing supply of future resources) and you just go "how could she be so blind"?
And if she doesn't get it, forget the tabloid level. Here come the headlights - freeze everyone....
A very simple instruction to the indebted out there....this will be your last chance to cut your level of debt before the game stops........that's when the banks have to pay a bloody sight more for the loot they borrow....and they will screw you for what they need....sucker.
Keep your eye on the criminals at the Fed and on the Piigs nations which look set to tell the banks to get stuffed...hello haircuts and massive losses....watch as the liars at the BoE finally admit to their lying and raise the rates to catch up with the inflation monster they will fail to stop. Oh and let's not leave out the aussie housing bubble that never was...and is now collapsing...while last up comes the rise of oil and the cutbacks in China.
Yep.....recovery is here....off you go and borrow borrow borrow.
I agree steven, more people are now paying down debt than ever before which is good for NZ as a whole. I wonder how many ppl with just credit card debt are using the banks offers to transfer their debt at rates lower than mortgage rates to reduce that debt as well? Maybe I should put the mortgage on the credit card to get a better deal....
The reason for the better mortgage bait is not just related to the downturn in NZ....the banks are at war across the ditch:
"UBS has forecast the margins of the top four banks, on average, will fall from 2.26 per cent in 2010 to 2.25 per cent this year then slide significantly to 2.13 per cent in the next two years
"In the mortgage and deposit space -- which is what you classify retail banking as -- you are seeing very aggressive pricing on deposits and pretty aggressive deals on mortgages."
This war will not end until the weakest bank goes under....the market is set the shrink not grow...retaining the bloated revenue stream from excessive lending into the bubbles on both side of the ditch, is only possible if one bank drops out.
Bank funds are set to cost more..while demand for credit is set to fall...that is a recipe for blood on the balance sheets...sell your bank shares now.
The ONE important factor...
they have left the floating rate and short term fixed rate the same... still gouging the mortgage holders while they can .. If they are saying they have responded to the decline in the" swap rate" what is their excuse for excessive margins against the OCR for flaoting and short term fixed rates.... other than PROFITERING
early reports said only 1 yr plus rates had been reduced- i was looking at 6 month rate but they have now moved on these- like the oil company "cartel" it only needs one to move and the rest to follow- still cannot see why the floating rate has not moved yet as they already have 0.50% "fat" in the rates at present.
IF the RBNZ does not reduce the OCR next week are we going to see the bank's increasing their rates again as they have"factored in a OCR cut" but in the bext breath tralk about "swap rates" and low and behold the old "90 day bill rate" rears it's head again !!! - or are the banks trying to dictate to the RBNZ to cut rates - I cannot recall any comments from Bollard in the last week or so.
Looks like they can blame anything for interest rate increases/decreases - just like all statistics - they can be used to make any result positive or negative
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