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Major banks are still adjusting their rates down as wholesale rates continue their fall

Major banks are still adjusting their rates down as wholesale rates continue their fall

Westpac and ASB have reduced interest rates this morning.

Westpac has fallen into line with its competitors by reducing its two, four and five year fixed mortgage rates.

Westpac's two year rate moves to 5.49% 5.40%, the same as ANZ and The National Bank. This is the lowest rate for a bank for this term.

Their 4 year fixed rate reduces to 6.25% from 6.50%, and their 5 year fixed rate falls to 6.70% from 6.90%. Neither of these offering is market-leading, however. ASB, SBS, TSB and BNZ all have lower rates for these terms.

All bank mortgage rate offers are here ». Our handy mortgage calculator is here » and if you are contemplating shifting from a floating or variable rate mortgage to a fixed rate one, you should check this handy tool here ».

Meanwhile, ASB and BankDirect have reduced term deposit rates.

Each have reduced their 5 month TD rate to 3.25% from 4.40% and added a 'new' 100 day rate of 4.10%, an overall reduction in short-term offers. Their 6 and 9 month offer of 4.00% is unchanged.

In addition, each has reduced all its term deposit rates from 2 to 5 years by 25 bps.

It's 2 year TD rate is now 4.50%, its 3 year rate now 4.75%, its 4 year rate now 5.00% and its 5 year TD rate now 5.25%. Term PIE rates for equivalent terms have changed by the same amount.

You can see all term deposit rates from all institutions here » and here ». Term PIE rates, with their equivalent yields, are here ».

(Corrects error in Westpac 2 yr fixed rate)

Fixed mortgage rates

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16 Comments

Keeping interest rates low could be bad for the economy as people make riskier investment decisions that could later be more damaging to the economy. 

I have sourced from the website provided below a good example of inflation and deflation effects.

http://www.supremewiki.com/index.php/Inflation 

Different people and organizations are hurt by inflation versus deflation. Large debtors like inflation because it reduces their effective debt. For example, if Joe pays $100k for a house at 8% interest with inflation at 3%, he's effectively paying 5% interest on the loan. If inflation jumps to 10%, he's happy, he's now making 2% on $100k instead of losing 5%. However, Joe's bank hates this; they were making 5% but are now losing 2% on the loan!

With deflation, the opposite occurs. Joe pays $100k at 8% with inflation of 3%. Inflation drops to 0 and then goes negative to be 5% deflation. Joe finds that instead of making 3%, he is losing 5% due to deflation alone. Overall, his effective interest rate has shot up to 5%+8%=13%. Joe's bank loves this situation, though, since they're making 13% instead of 5%.

 

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Easy, inflation....Deflation kills govn revenue so with no tax base they cant pay back...so we default.

regards

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It will be interesting to see if QEx even touches the sides....you are right that at some stage, probably very soon they will QE like mad, there is no options left.

However 2 things,

1) I think the Republican party wants to destroy the US social systems so badly that it is prepared to take on a Great Depression to achieve it....I think its a loonatoc play, but then thay are lunatics.....I think the will succeed myself....now or in the next few years.....they will simply destroy US consumer confidence and that is the economy....it wont recover until the GOP is purged from the Political system.....so I expect Congress and a Republican President to stop QE......mind you I think its too late anyway....not unless its some mind boggling figure like 5 trillion+ fat chance...see 2.

2)  The problem with QE is its simply too small a concept...there are multi-trillions in debt, future commitments and CDSs and the economy of the world is just too small to cope...let alone QE...QE is like peeing into a toilet, the level wont change and in fact it will empty as consumers give up.

We dont even need to discuss Peak oil which under-writes all the above....I cant believe we will stagflate along til it hits.....

regards

 

 

 

 

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Nah...the real major problem in NZ is that there are too many wanting the fruits of a lifetime of hard work and thrift..and they want it aged 20 with bells on top.....

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Nah : too many CEO's on stratospheric slary & perks packages !

 

...... limit CEO's to just 25 times the renumeration of the lowest paid employee / subbie of the firm ......

 

For example , the CEO of Telecom would receive a maximum of 25 times the pay of their call centre operators in Manila ..... ummmm ..... 450 pesos , multiply 25 times , convert to Kiwi pesos .... $NZ 88 700 p.a. ..... that'll please the long suffering shareholders of the firm !

 

...... that'll make 'em think twice before outsourcing Kiwi jobs to third world sweat shops ...

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We will look again at your Telecom account Mr Gummy Bear Hero. Be advised!

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... nationalise the bakeries ! ...... the price of bread these days , it's the giddy limit .... those usurious bakers are rolling in dough ...profiteering off the backs of all the Kiwi welfare recipients on Struggle Street  .....

 

We'll dump the folate into the mix whilst we're at it ..... and ban that poisonous white bread .... you're only getting wholemeal loaves , once the government takes over ..... it's all for the best , trust us ! ......

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You've been listening to banker parasites, right!........they don't 'slave away'....they just create some credit and look for a fool to borrow it.....and LOL the stupid salary bloated RBNZ and Beehive plodders think it's a great way to run an economy.

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Have the RBNZ & the Beehive drones been reading the collected works of Robert Kiyosaki again ? .......

 

....... Rich Dad says leverage is good ....... yes !

....... Rich Dad says borrow for income producing assets only ..... yup , got the rentals ...

....... Rich Dad says roll over & fondle your goolies  in public ..... OK , done that ...

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Keep it seemly Gummy...

Family site

cheers

Bernard

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....... oooops , my bad ! ..... there I was thinking that Bernard was ratty 'cos I mentioned " Kiyosaki " ......

 

Kinda tough on the kids , the old " Rich Dad / Poor Dad " ..... when most of them  in New Zealand have a welfare Dad ........

 

....... are you a Kiyosaki-denier , Bernard ?

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The bloopers are sure to go over big with the jr. interest.co.nz followers

Mine love 'em.

http://youtu.be/GgZuDOGd-0c

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Let's follow this madness to see where it leads.....oh look it goes to zero mortgage credit cost for up to 5 years....yessir we have us a growth economy...not.

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too many people wanting

too many people taking

not enough people paying.

flat tax rate with no exemptions could fix this

also do away with trusts.

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The Kiwi Battlers out in the Mortgagebelt are pretty relieved that interest rates are falling. This means they can pay the school fees & work petrol without maxing out the credit card.

However, the stimulus effect will be limited  -  not so many rushing into Norman Harvey putting Flatscreen TV's & iphones on 50 month interest free as a result of lower rates.

Plus the sinking lid economy reflected by lower interest rates means more of their mates will be out of a job or at least a decent-paying job.

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In H.N case the cost of finance is taken out of the sales persons commission...zero sum game.

Increased purchasing power for one individual is a loss for another.

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