A flurry of home loan rate changes

Three banks change mortgage rates this morning, some up, some down, some market leading

1st May 14, 8:21am by David Chaston

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Changes to bank mortgage rates are coming through faster now with three banks making moves this morning.

BNZ has raised its TotalMoney floating rate by the full +0.25% that the OCR went up last Thursday. This rate is now 6.24%

But it only raised its other floating rates by 15 bps to 6.34%. This involves its Standard, Flybuys and GlobalPlus products and sets them all at a level that is more competitive with other banks levels.

BNZ also raised term deposit rates (see separate story).

The Co-operative Bank also raised its variable rate by +0.25% to 6.20%.

They also raised their six month and one year fixed rates by 25 bps and 20 bps respectively to 5.80% and 5.85%.

At the same time, the Co-operative Bank has lowered its 5 year rate by 11 bps to 6.99% from 7.10% and pitching it at the same level as market leading SBS for this term.

And then Westpac has made mortgage rate changes, not to its floating rates which are still unchanged following the April OCR increase. Its two year fixed offer is now 6.19% as a standard offer, replacing its 'special' of 5.95%.

And Westpac has shifted its 'special' to a four year offer of 6.59% which is 60 bps below their standard rate for this term. It is also the best four year rate in the market.

These new rate changes compare now as follows:

below 80% LVR	Floating	Revolving
		Credit
	6.24%	6.35%
	6.25%	6.25%
BNZ - Total Money	6.24%	6.24%
BNZ - Standard & FlyBuys	6.34%	6.34%
Kiwibank	6.15%	6.15%
	5.74%	6.00%

Co-op Bank	6.20%	6.20%
	6.24%	6.24%
	5.90%	5.90%
TSB	6.29%	6.29%

--------------------------------------------------------------

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 »
--------------------------------------------------------------

See all banks' carded, or advertised, home loan rates here.

The latest fixed rates compare as follows:

below 80% LVR	1 yr	18 mths	2 yrs	3 yrs	5 yrs

	5.85%	5.99%	5.95%	6.85%	7.40%
	5.85%	5.99%	6.49%	6.85%	7.40%
	5.85%	5.99%	5.95%	6.29%	7.40%
Kiwibank	5.85%		6.19%	6.60%	7.20%
	5.85%	5.99%	6.19%	6.85%	7.40%

Co-op Bank	5.85%	5.85%	5.99%	6.35%	6.99%
	5.59%		5.79%	6.55%	7.20%
	5.60%	5.85%	5.99%	6.35%	6.99%
TSB	5.70%	5.85%	5.99%	6.60%	7.40%

--------------------------------------------------------------

Fixed mortgage rates

Select chart tabs

Source: interest.co.nz

Source:

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

4 Comments

by Boatman | 1st May 14, 8:41am 1398890461

A Question about interest rate increases :-

Has the RBNZ actually given us specific emperical evidence of an overall increase in the general level of prices , thus showing that inflation is widespread ?

We have seen administered prices ( municipal rates for example ) go up by more than inflation , but these are not heavyweights in the CPI

I have seen some evidence of inflation in the construction sector , but this is simple demand driven pricing , not speculative activity that could see a sustained level in price increases , and when demand and supply are more balanced , these costs will drop .

I think the RBNZ is acting too soon , and risks damaging our recovery

by David Chaston | 1st May 14, 9:08am 1398892087

I suspect its the non-tradeable inflation their are watching. In the March 2014 quarter it was up to 2.965% pa. See here.

The high exchange rate is keeping the tradeable inflation component controlled - for now. But I doubt any policy maker could rely on that, especially given they say their analysis shows the NZD is overvalued by at least 15%. If that falls back to sustainable levels, tadeable inflation will zoom higher. Perhaps the future is indicated by those sharp falling dairy prices.

But, actually the RBNZ targets future inflation pressure, not current inflation. They look ahead. Inflation expectations in a range of surveys show people in New Zealand expect it to pick up. That last survey was out yesterday, the ANZ one showed a 2.59% inflation expectation. The last (Feb 25) RBNZ survey showed inflation expected in one year of 2.3%. (M14).

This is what they had to say about expected inflation.

by steven | 1st May 14, 9:45am 1398894308

Im not so sure its the exchange rate as the lack of money in ppls pockets constraining the tradeable inflation. I mean I dont doubt that the tradeable sector has the ability to price at the maximum people will stand, and are doing so, ergo even when the exchange rate drops I think we'll still see lack of tradeable inflation all else being equal.

On top of that the non-tradeable is in effect a monopoly so can raise almost at will, that means less and less for the tradeable sector, got to wonder just when we'll see some serious effects.

eg, do we have any occupancy rates for commercial malls? From what I can read they charge rents that are higher than the world average and Im seeing empty spaces....just wondering.

Expected inflation, well lets go back 5 or 6 years and drfit forward and look at the expectations over that time period. We are and have been constantly bombared with here comes inflation and yet its no where to be seen.

As for how ppl expect it to pick up, Im not so sure polling so many ppl that seem to no tunderstand some fundimentals like peak oil and the effects of energy costs in our economy, or the huge debt burden we now carry....

2.59%, well lets see how that goes, I'll book this in my calender appointments to remind me, it will be interesting.

regards

by dtcarter | 1st May 14, 10:55am 1398898519

The problem is you can't measure the counter-factual. You can only measure inflation after the RBNZ have raised rates in response to expectations. So if rates go up inflation may be kept below 2%, but the question you are asking is what would inflation be like if they hadn't raised rates, would it really be 2.5%?