Selective home loan specials keep coming from the main banks as they fight for slightly softer housing demand

Selective home loan specials keep coming from the main banks as they fight for slightly softer housing demand

ASB and Bank Direct have introduced a 2 year mortgage special rate for borrowers with 20% equity in their property.

They have cut the rate to 5.95%, 34 bps lower that the previous rate of 6.29%.

It is effective today at 5pm.

The new rate is available to all new and existing home loan clients.

However it is subject to customers having an ASB credit card and having their main transaction account with ASB - that is their salary, wages, business or rental income credited to this account.

The rate is not available to existing clients who have or access "packages" or other ASB discounts, says the bank.

This rate move positions ASB as having the lowest two year home loan rate among its main rivals, although both the Co-op Bank and SBS have a lower rate for this term.

As a 'limited time offer' it is allowing ASB to position a fighting rate at a time the markets are waiting for the mid-March RBNZ rate decision.

Wholesale rates had crept up before New Year in anticipation of an official rate hike, but on international events have softened since then. More recently, they have started rising again as the threat of an RBNZ hike gets closer.

However it is clear that market participants still have some doubts that the RBNZ will actually move in March, especially if the exchange rate continues its rise.

See all carded, or advertised, bank home loan rates here.

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 5 yrs
           
5.49% 5.85% 6.29% 6.65% 7.20%
ASB 5.49% 5.85% 5.95% 6.60% 7.20%
BNZ 5.39% 5.85% 6.29% 6.39% 7.20%
Kiwibank 5.49%   5.99% 6.40% 6.90%
Westpac 5.49% 5.69% 6.29% 6.39% 7.20%
           
Co-op Bank 5.29% 5.85% 5.85% 6.25% 7.10%
HSBC 5.39%   6.29% 6.55% 7.20%
SBS / HBS 5.35% 5.60% 5.80% 6.10% 6.70%
TSB 5.30% 5.85% 5.99% 6.40% 7.20%

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5 Comments

Interest rate cuts for the mortgage-belt.  Good news.
"However it is clear that market participants still have some doubts that the RBNZ will actually move in March, especially if the exchange rate continues its rise"  
If lending is a bit soft, then the price of money may lower to entice borrowers?

Watch carefully over the next few weeks leading up to the OCR review; Banks and Real Estate lobbyists will cook every stat they can get their hands on to "prove" the LVR's "are working", demand slowing, inflatrion under control, building plots on steam ..... & etc and there is every chance (history shows us) that their creature, the RB, will again do their work instead of dealing to inflation (it's lawful job) - leaving interests rates at emergency low settings in a 40 year record booming economy.
Ergophobia 

I can't understand that comment Ergophobia, Im told on here that banks actually want higher rates, apparently they make more profit. In fact, because economists were talking about rate hikes, one on here implied to us that it's bank economists who actually do the hiking...I'm confused but if you're right, and they're wrong, then I'd suggest that the banks better start talking to their economists because they're not toeing the line...more confusion.

GA, words are cheap, judge them by their deeds. Banks prosper from having lots of loans out, even at artificial low rates provided them by the RB (who even manage their risks for them). They also benefit from the "churn" in the gold rush housing market. Ticket clippers.
Regards, EP

EP - my comments were purely tongue in cheek, you're definitely right, banks make money from lending and they will naturally alway prefer the best conditions possible for borrowers to want to borrow, I.e. low rates. 
Its also plain though that banks don't talk down the economy, or inflation risk etc, they say it geniunely as they see it, otherwise why haven't they sacked their economists who have been saying for 6-12 months that hikes  are coming in Q1 2014...and they're right. But then it's in their interests to do so. What many don't seem to realise is that if the RBNZ doesn't raise rate early enough in a cycle, and thereby lets inflation get away on them as they did by 2005-07, they know what's coming further down the track, a knee jerk very high OCR hiking program from the central bank that will more than stress their loan books. The RBNZ doesn't get that right all the time, but if someone is a borrower they better hope it's not too late.