Kiwibank ends its pre-Christmas special, but makes big cuts to 3-5 year fixed rates

Kiwibank is ending its "limited time pre-Christmas special" 4.85% six month mortgage rate offer, and cutting mortgage rates for its three, four and five year fixed terms.

These changes are effective Monday, December 17, 2012.

Their six month rate will revert to their standard 5.25% for this term, which is the same as the rate for one and two years.

Their three year rate will reduce to 5.65%, a cut of 10 bps from 5.75%.

The rate for four years falls 21 bps to 5.99% from 6.20%.

The rate for five years also falls to 5.99% which is a cut of 51 bps from 6.50%.

These are standard rates - "no restrictions, no caveats, no criteria, no limited time".

Matching rate reductions apply to the Kiwibank products sold under the AMP Home Loans brand. Under that brand, an additional 10 bps reduction is available for "Priority" loans, those of $200,000 and above.

These new lower rates in the three to five year part of the market place them well below the other main lenders, except Westpac who also have "special" rates for terms of four and five years at 5.99%.

We are expecting similar rate adjustments to the Christchurch new build Special programme and will update this story when these details are known.

Kiwibank's Offset variable rate remains at 5.50% and standard variable at 5.65%, and its one and two year fixed rates remain unchanged.

You can find all current mortgage rate offers here.

Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »

Here is a current market comparison of rate offers for mortgages with a five year fixed term:

  5 years fixed
ANZ 6.60%
ASB 6.50%
BNZ 6.50%
Kiwibank 5.99%
Westpac - Special 5.99%

Other banks have these offers for the same term:

The Co-operative Bank no offer
HBS Bank 5.99%
HSBC Premier 6.65%
SBS Bank 5.99%
TSB Bank 6.50%


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So the other day twas 'the end of the golden era' or some such regarding interest rates,  despite Wheeler's recent report.  What's up? Are kiwibank trying to lock people into the next set of 'high' interest long term rates in a 'oooh, act now or miss out' ruse before another round of competition based cuts to the shorter terms?
Or SHOULD I act now??

Cuts, cuts, cuts, more interest rate cuts coming ...
Remember we are in a Down -flat- Down - flat phase/s of a 20 year economic cycle.
And this one is a Big Down.  
The only thing that won't be going down for the next 3 years is unemployment.
More savings for home-owners with mortgages.....
Don't fix for too long .... as there's another cheaper rate coming soon. 
Do you think banks are going to tolerate flat or dropping lending levels going out the door?  The whole system requires continued borrowing, mainaining house prices, .... whatever it takes. 

"Remember we are in a Down -flat- Down - flat phase/s of a 20 year economic cycle".
Look out over the heads of the steerage passengers - see how even the waves are..... that's what's ahead  too......

Don't be fooled by the window dressing.  This is a rates up scenario.  Gone are the 4.85's and hello to the 5.25's.

uh huh.....lets see where they go next.....
my bet is continue down....

What will it take to drive rates lower?  I'd suggest lower longer term wholesale rates - possible.  Lower deposit  rates - also possible.  Without a catalyst mortgage rates won't go lower, unless there's profit offset somewhere else.