ASB, BankDirect and Sovereign have all announced increases in their fixed home lending rates.
ASB is removing its 4.95% one year fixed special rate of 4.95%, with this reverting to 5.19%.
Its three year fixed rate rises 20 bps to 5.95% from 5.75%, its 4 year fixed rate rises by the same amount to 6.15%, and its five year fixed rate becomes 6.45%, up from 6.25%.
At the same time it is also reducing its 6 month fixed rate by 26 bps to 5.19% from 5.45%.
They are effective on Saturday, June 22, 2013.
The same changes apply to both BankDirect and Sovereign Home Loans.
Sharp rises in credit spreads and wholesale swap rates are behind these increases.
Earlier today, Westpac warned it was increasing rates at the end of next week.
See all advertised mortgage rates here.
| 1 yr | 2 yrs | 3 yrs | 4 yrs | 5 yrs | |
 |
4.95% | 5.45% | 5.80% | 6.10% | 6.30% |
 |
5.19% | 5.45% | 5.95% | 6.15% | 6.45% |
| BNZ | 5.25% | 5.40% | 5.80% | 6.10% | 6.30% |
| Kiwibank | 4.89% | 5.25% | 5.80% | 6.10% | 6.25% |
 |
4.94% | 5.45% | 5.90% | 6.15% | 6.25% |
| Co-op Bank | 4.94% | 5.35% | 5.75% | 5.99% | |
| HSBC Premier | 4.99% | 4.99% | 4.99% | 5.50% | 5.75% |
| SBS / HBS | 4.95% | 4.99% | 5.65% | 5.65% | |
 |
4.88%* | 5.30% | 5.75% | 6.10% | 6.30% |
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20 Comments
While I agree on the "unison", which is to be expected, their funding is common as is the market, I dont see that ripping customers off is something they'd be overt in doing. I mean its an obvious way to lose an otherwise good customer and the chance to add on business like life insurance etc etc.
regards
Eee, don't say that! Kimy won't be happy to hear your sentiment.
Interesting that the banks have done this of their own accord. I thought, as I guess did many others, that it would be a push in the OCR that would tip the balance against the low rates we've been having recently. But no.
It seems there's very little understanding of how banks price their mortgages. It may surprise some that most banks don't actually set mortgage prices off the OCR.
Fixed rate mortgages have risen because swap rates have risen. It's no more complicated than that. If swap rates fall, then you can expect fixed rate mortgages to fall.
Yes, I realise that they're not directly correlated to the OCR or set by the Reserve Bank. But the OCR is still influential in the market (http://www.rbnz.govt.nz/monetary_policy/about_monetary_policy/0072140.h…).
Jetliner - if you want to understand what impacts fixed rates the most (by a mile) I'd suggest that you, Kimy and MortgageBelt do the exercise of overlaying the US long-term rates over NZ long-term rates (hint highly correlated and ours don't drive theirs). So at the moment you should be more focused upon what the Fed is doing than anything whatsoever to do with the NZ OCR.
Yes the RBNZ controls the OCR and one can cling to that but of course you take the very big risk that if that gets hiked by more than expected what you have as an alternative is long since gone. Of course many will claim it can't move that far, but note who says that, many such as those already named that don't really have any understanding of what impacts what.
Yes, that makes sense, Grant.
I don't have a mortgage at the moment (unfortunately it also means I don't have a house, and am unlikely to be able to buy one in Auckland the way things are at the moment), but I am keeping an eye on the economic weather and trying to read the tea-leaves/gaze the crystal balls like everyone else.
I think that's the right approach Jetliner. I feel really sorry for the situation that many young people find themselves in currently when looking to buy their first house. Truth is, based upon income to house price ratios, they are at unsustainable levels not seen in many decades and will not remain there forever simply because it is unsustainable. Theyre just barely affordable for some currently because of the 60 year low in interest rates, but despite what many say on here, these rates are also unsustainable at these levels. So that ratio will come down at some point when interest rates move up, as it will cause supply to increase from the sale of over-leveraged floating rate home owners who were too late to move. The problem of course is when, I suspect within a couple of years but too many factors to balance to really make that assessment. Even the experts can't second guess the Fed so we're certainly not going to be able to.
Patience is the key but admittedly damn hard to maintain that when many have been waiting years to buy as they understandly desperate to settle down, get the dog, and have the baby etc.
Kimy with respect, you don't get away with comments like that when you can't give me even a ball park area of margin - it's not secret, it's the wholesale cost of funds plus their margin. That totals 4.70% for you right, so if you know that wholesale cost which ballpark wise is pretty clear to anyone who knows anything about interest rates, then you have that margin to tell me.
If you can't do that you're just proving that you're totally uninformed about interest rate markets, yet feel the need to regularly come on here and try to talk with authority. Sorry to be blunt, but without factly incorrect statements being outed for what they are, you just mislead others on here. In the end facts count, speculation, nothing.
We were talking about the mortgage market and interest rates, and you change the subject to bank profits which are a reflection of the likes of bad and doubtful debt, corporate lending, business lending, financial markets sales and trading, cost cutting, out-scouring and a whole lot of other factors outside of mortgage lending. I think we're finished here as you're proving you can't discuss the subject ( and the rugby's finished - bed).
My suggestion Kimy, we can all have an opinion but when I get into areas on here where my knowledge is less than others, and a times plain wrong, I listen to what's being said thats factual and better informed, and I learn something - good policy and the main reason for being here surely ?
Hopefully not abuse KH , more like frustration, so I apologise to Kimy if that seemed the case - but let me ask you then, in a dicussion about interest rate which iswhat itvwa, and if you understand the margins banks make from floating mortgage lending, what bank profits got to do with it - I.e. are their mortgage margins globally competitive, that was the discussion.
KH - you say Grant A was abusive towards Kimy - where? I just don't see it. I saw he was trying to inform, but unfortunately the truth and facts don't line up with Kimy's world view. Not saying Kimy is wrong, it's just a difference of opinion and not abuse.
I understand the point about banks profits, but that's a different and wider discussion. This is about current mortgage rates and margins, which are very slim today. To help you think about this, take the difference between the 1 year mortgage rate and 1 year TD rate. There's a 1 year margin. Now, deduct cost of capital needed to be held against that mortgage. Take off a proportion for running the business, staff costs, rents, electricity etc. What's left? Not a great deal. I'd suggest not enough to make record profits.
The banks have said that the OCR doesnt directly determine thier rate...what they do do is hide behind the changes in the OCR to make their changes and hence make (I assume) more money. The problem they are having now is I assume a) the OCR is lower than they can borrow for so if it goes (much) lower they cant follow. b) If the commercial rates rise their rates (and ours) will rise even if the OCR is static or even if it drops. This means we'll see the banks exposed to the flak they deserve.
In terms of "many others", well from the above and with the probability that at some point the carry trade will cease as money runs back to the US safe haven we might see a nasty spike in borrowing costs. Meantime the OCR could fall to <2% to try and prop up our tetering economy...a disconnect...and a nasty one......we are a risky currency and we borrow cheaply because others get it even cheaper.....
The only Q is, is it worth fixing and if so how long for to try and dodge the above possibility...
regards
A little piece of disturbing information if you have a bank account in Australia that you haven't used for 3 years according to this report.
http://www.21stcenturynews.com.au/government-asic-sweep-money-inactive-…
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