After a week of few changes, the mortgage market burst into life again this morning.
Firstly Kiwibank has taken another 10 bps off its two year 'special'.
That has taken its two year rate to 5.89% which is now the market-leading rate for this term among all banks.
Then Westpac also announced its own new 'special'.
Westpac is offering 6.19% for three years fixed.
This is the best three year rate among the main banks, but SBS Bank has a lower three year 'special' of 5.95%.
Both these new rate offers from Kiwibank and Westpac come with terms and conditions, usually involving at lease 20% equity, a requirement to have your salary deposited at the bank, and the requirement to take up some other banking product.
The rate curves have tightened noticeably recently and there is only about a 1% difference between the one year and five year fixed rates for many banks.
This tight range makes it harder for banks to offer large rate advantages over their rivals and so they are using other non-rate incentives to gain attention.
Non-rate inducements are now growing in importance, especially cash incentives. However, you should be quick as a number of those offers are due to expire soon.
Banks bundle these incentives when they negotiate so borrowers will need to be careful and clear of their objectives in these discussions. Use a mortgage calculator that displays the full cost of your loan when you are making these assessments.
See all banks' carded, or advertised, home loan rates here.
This is how the updated mortgage rates compare as at 7:00 am Tuesday, August 26, 2014:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
6.05% | 6.25% | 5.99% | 6.65% | 7.15% |
 |
6.09% | 6.30% | 5.99% | 6.65% | 6.99% |
 |
5.99% | 6.25% | 5.99% | 6.25% | 6.99% |
| Kiwibank | 5.99% | 5.89% | 6.65% | 6.95% | |
 |
6.09% | 6.30% | 5.99% | 6.19% | 6.99% |
| Co-op Bank | 6.00% | 6.00% | 5.99% | 6.25% | 6.89% |
 |
5.95% | 5.95% | 6.85% | 6.99% | |
 |
5.85% | 5.99% | 5.99% | 5.95% | 6.79% |
 |
6.00% | 6.05% | 5.99% | 6.60% | 7.00% |
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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 »
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