Raising the stakes by lowering the rate

TSB Bank ups home loan ante launching market leading 2yr rate, raises cash incentive, adds a home makeover draw

29th Aug 14, 2:57pm by David Chaston

TSB Bank has launched a new 5.79% two year carded fixed home loan rate, which is the lowest rate for that term in the bank market.

At the same time, TSB has reduced the interest rate on its reverse equity mortgage rate to 8.00%, down 65 basis points from 8.65%.

In addition, TSB has changed its cash incentive for signing up to a home loan.

It now offers up to $2,500 cash for new loans of $250,000 or more, or $1,000 cash payment for loans between $100,000-$250,000. Previously it offered $2,000/$1,000.

In addition it has a new prize draw offering $20,000 for a Home Makeover for those who take out a new loan with them.

These non-rate cash inducements for most of the four major banks end on Sunday, so TSB Bank's revised offer may have them re-thinking that position.

BNZ had already ended its cash-back offer at August 1, but was actively meeting the market with a continuing cash-back offer ... "for a limited time you could also get yourself a healthy cash bonus with new lending over $100,000."

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 3:00 pm Friday, August 29, 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%	6.19%	6.99%
Kiwibank	5.99%		5.89%	6.65%	6.95%
	6.09%	6.30%	5.99%	6.19%	6.99%

Co-op Bank	5.95%	5.89%	5.99%	6.19%	6.89%
	5.95%		5.95%	6.85%	6.99%
	5.85%	5.99%	5.99%	5.95%	6.79%
	6.00%	6.05%	5.79%	6.60%	7.00%

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

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

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.

14 Comments

by Stephen Hulme | 30th Aug 14, 10:45am 1409352304

Artifice to attract the thirty year loan signature?

First-home buyers struggling to afford soaring property prices and older people refinancing after marriage splits are spreading repayments over longer terms but lumping themselves with tens of thousands of dollars more in interest.

Some will need to be working well into their 70s to pay off their home or risk losing it in a mortgagee sale.

Three-decade mortgages make up about half of some banks' new lending and the average age of a first-time buyer is now 34.

A Kiwi borrower buying a median-priced $416,000 home with a 20 per cent deposit on a floating 6 per cent interest rate would pay $717,965 over the life of a 30-year loan, according to Sorted's mortgage calculator. They could save $146,135 on a 20-year term. Read more

I guess NZers will welcome the advent of the Japanese style intergenerational 100 year mortgage?

by Henry_Tull | 30th Aug 14, 12:34pm 1409358896

Parents behaving badly:

Australia's largest banks have warned the Financial System Inquiry that forcing their creditors to wear losses in a crisis could see the banking sector downgraded by ratings agencies, face increasing funding costs across the economy and potentially exacerbate a downturn.

Read more: http://www.smh.com.au/business/banks-demand-bailout-protection-20140829-10a7en.html#ixzz3BpZcvwdA

talk about deposit takers.

by Andrewj | 30th Aug 14, 1:14pm 1409361291

what can one say, you need to be light on your feet.

http://faculty.london.edu/apavlova/Commodities.pdf

They already pretty much 'own' the economy.

In the 2012 edition of Occupy Money released last week, Professor Margrit Kennedy writes that a stunning 35% to 40% of everything we buy goes to interest. This interest goes to bankers, financiers, and bondholders, who take a 35% to 40% cut of our GDP. That helps explain how wealth is systematically transferred from Main Street to Wall Street. The rich get progressively richer at the expense of the poor, not just because of “Wall Street greed” but because of the inexorable mathematics of our private banking system.

http://www.globalresearch.ca/its-the-interest-stupid-why-bankers-rule-t…

by Grant A | 30th Aug 14, 3:54pm 1409370842

Says alot more Andrew about the borrowers inability or reluctance to save for what they require rather than the banks providing them the ability. It says a lot about impatience and a lack of financial nous in some many of the western world in particular.

by Andrewj | 30th Aug 14, 4:15pm 1409372146

But the lenders didn't lack fiancial nous. We have been lead to saughter and now we are expected to socialise the losses.

Cognitive dissonance: the engine that drives self-justification[edit]

The need to justify our actions and decisions, especially the ones inconsistent with our beliefs, comes from the unpleasant feeling called cognitive dissonance.^[1] Cognitive dissonance is a state of tension that occurs whenever a person holds two inconsistent cognitions.

by Grant A | 30th Aug 14, 5:35pm 1409376934

I just love the excuses people makes for themselves and others with that argument Andrew - retailers will sell you far more than you need at a drop of a hat, and many many people have got themselves into seriously huge messes in doing so. Banks are retailers, yes they may know your financial situation better than most, but they often don't know how irresponsible you are in all areas of your life. The majority of people are at least somewhat financial savvy and have the discipline with the same amount of debt to manage it well, others don't and oiften that only becomes obvious afterwards. Youre asking hell of alot of banks to be the minders of all in society in lieu of personal responsibility.

by Stephen Hulme | 30th Aug 14, 4:19pm 1409372341

Yes, but the impatience of corporates wishing to sell product should not be discounted - witness the explosive auto loan business in the US:

On one hand we wrote three weeks ago that a "shocking" 77 million, or one third, of Americans face debt collectiors: a statistic which crushes any suggestion that US household credit is substantially improving based on trends in 30, 60, or 90-day delinquency, as it means that the real pain is not at the near-end of the default/delinquency timetable, but the far end, which incidentally has just as dire an impact on one's credit score as a plain vanilla default (and explains why none other than Fair Issac has jumped in to "adjust" its credit methodology to artificially boost FICO scores of these millions of Americans).

On the other hand, we have been closely following the ongoing deterioration of the car subprime loan bubble: something that both Bloomberg and the Fed have both also been paying close attention to recently, yet a bubble which nobody wants to burst, because as we wrote several days ago, it is none other than the subprime car loan bubble that allowed car production to surge the most last month since Obama's Cash for Clunkers capital misallocation program, in the process lifting overall manufacturing and Industrial Production, and thus GDP. Read more

by Andrewj | 30th Aug 14, 4:43pm 1409373837

The Purpose of War According to George Orwell (1984)

http://akamat.wordpress.com/2007/07/31/the-purpose-of-war-according-to-…

by cowboy | 30th Aug 14, 5:42pm 1409377326

There are other interests at work who as trying to push the system along which is why almost all of us can't just buy from savings - whether it's earthquake compliance, fencing off 2% of your arable land, rates & insurance rises, insulation requirements, or a constant stream of not-quite-compatiable version updates, people are gaming the system and it's getting harder to step off the wheel

by Grant A | 30th Aug 14, 5:57pm 1409378277

Cowboy, I absolutely agree that there are bigger issues at play, and its global - a multitude of issues/influences that we debate here every day.

by cowboy | 30th Aug 14, 6:04pm 1409378689

I supposed I'm just constantly suprised that the US writes laws to "encourage" their people to buy new cars (cheaply) while our government writes rules to destroy it's productive sector (to fund interest payments to overseas banks) - why would they do this??

by Grant A | 30th Aug 14, 6:06pm 1409378799

What are the rules being written to destroy the productive sector?

by cowboy | 31st Aug 14, 10:43am 1409438628

Increased compliance and documentation, increased rates (we're got/had excellent water, do we really need cost recovery on "worlds best water"?), increased OCR, increased pricing, more checks, pushing up of minimum wage (how can we start a low level business, eg producing NZ nails, to comete with overpriced foreign nails, if the the basic costs are through the roof). Increased living costs due to stacking of OIO legislation.

In dairy industry to grab single market: cost of upgrading plant to lower sanitiser by way of threat, cost of shares due TAF pushed by government, new regulations coming in for milk temperature entering silos to be dropped another 5 or more degrees C, compulsory monitoring of that milk temperature as it goes in. Not bad ideas... but the signal from the auction is that people want to pay less, not that they'll pay more for added value.

In building: more regulations and constant upgrade system, breaking down the building process into a bunch of seperate qualifications which all have different requirements, implimentation of quality controls that call for materials far in excess of their function, pushes towards work compliance monitoring rather than push towards excellence of tradesman.

Actually I'm seeing that later one in dairying too ... I've been waiting 3 yrs for some re-wiring on my meter board (to put in modern RCD vs the old porcelin which can give a nasty shock when searching for faults), and some of the workmanship be sparkies and "qualified engineers" which requires me to go through afterwards and adjust things so they fit/close/work. There is no way to push for timely or quality of work, so it just adds more expensise...but legally I'm not allowed to fix their mistakes so they just keep charging for lousy work. result, meter boards I cant have staff touching, and punative costs to do productive upgrades and a workplace I can't walk away from (safely entrust to staff)..... it's almost inf the people writing the rules are tucked away safely in offices and have no expose to the physical or financial dangers they create.

by Stephen Hulme | 30th Aug 14, 2:31pm 1409365919

I just love this convenient loss of financial memory;

Even though no Australian bank required a bail-out during the global financial crisis the inquiry is considering ways to minimise the risk that taxpayers are put on the hook during a future shock.

It was ever so convenient that the Australian Government Future Fund had very large chunks of government gifted cash parked at the RBA (2007 to June 2009), which lent the same to the Australian banks on a collateralised basis - how else to earn a return for the future fund?

The consecutive June ending year cash allocations were , AUD 38.73, 34.574 & 22.262 billions.