There are some big mortgage rate moves to report this morning.
Both ANZ and Westpac have announced separate market-leading home loan rates.
ANZ is matching Kiwibank by adopting a one year rate of 5.69%.
In ANZ's case this is a 'special' where 'conditions apply'. However the Kiwibank offer is a standard one without special restrictions.
ANZ have also reduced their two year fixed rate to 5.75%, a market level adopted by most of their rivals.
And they have added a new three year 'special' of 6.09% which is below their main big-bank rivals but still well above the offers for this term by a couple of the smaller banks.
In Westpac's case, they too have adopted the 5.75% price-point for a two year fixed rate. This is a 'special' offer, with conditions.
But Westpac have aced the market for the five year term, offering a 'special' rate of just 6.49% which is well below all other bank offers. It beats the next best offer by 30 bps.
Westpac's 'special' conditions require at least a 20% deposit, salary credit, and a Westpac credit card or specified insurance product.
ANZ's 'special' conditions also require at least 20% equity, and ANZ transaction account with salary direct credited, and any ANZ credit card or insurance product.
We should also note that BNZ recently re-introduced its $3,000 cash-back incentive after a period of withdrawing the stated amount and just saying they would match their rivals with a 'healthy' cash bonus.
All banks are feeling the competitive pressures, and they have room to move now that wholesale swap rates are retreating.
Yesterday, swap rates fell another -4 bps across the curve.
This sinking trend allows ANZ and Westpac to come late to a party that was kicked off last week by the Co-operative Bank, and then joined by BNZ, then ASB and Kiwibank. And to be fair, perhaps the earliest signals to the party came from HSBC who still have competitive rates even though they are unchanged in a while.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how the updated mortgage rates will compare as at 8:00 am Wednesday, October 22, 2014:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.69% | 6.25% | 5.75% | 6.09% | 6.99% |
 |
5.70% | 6.30% | 5.75% | 6.19% | 6.99% |
 |
5.89% | 6.25% | 5.75% | 6.19% | 6.99% |
 |
5.69% | 5.89% | 6.19% | 6.79% | |
 |
6.09% | 6.30% | 5.75% | 6.19% | 6.49% |
| Co-op Bank | 5.70% | 5.89% | 5.89% | 6.19% | 6.75% |
 |
5.75% | 5.75% | 5.75% | 6.99% | |
| SBS Bank | 5.85% | 5.99% | 5.99% | 5.89% | 6.79% |
 |
5.95% | 6.05% | 5.79% | 6.30% | 7.00% |
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31 Comments
More fuel on the fire.
Maybe this is not the end of the boom, but only the beginning.
Where are all those gloomsters who, not so long ago, said that interest rates would rise higher and higher and the property market would crash?
They're in hiding, cursing the day they decided not to buy, while grinding their teeth at the opportunites forever lost.
No cursing here. Happily pocketing real savings (rather than paper profits) every month from renting from a landlord who is happy to make a loss. Have enough now to buy a family house for cash outside Auckland although still not going to at these prices.
Salary increase over last four years = 26%, rent increase = 0%
My cousin in Auckland saw 50% gains on their proprerty in the same time. Decided to upsize in the same area and due to the proportinal increase in the next house size up has had to take on a bigger mortgage to make the jump than they would have 4 years earlier.
So I have more money in my pocket every month and they have less.
Graham Wheeler's Monetary Policy is fast becoming irrelvant as every man and his dog sidesteps the RBNZ moves
I had a young ( ish) mechanic change my brake pads the other day who told me to fix my mortgage because thats what he had done .
He said "Mate , the carry trade is forcing fixed mortgage rates down and now is a good time to fix"
Thats a mechanic telling an accountant to fix his mortgage !
What next ?
I dont have a mortgage , but if I did I would take my mechanics advice .
I fully agree with you nzcoolie....but.......the problem is the policy targets agreement in which it defines price stability as annual increases in the CPI between 1 and 3 percent.
Policy Targets AgreementThe Reserve Bank Act requires that price stability be defined in a specific and public contract, negotiated between the government and the Reserve Bank. This is called the Policy Targets Agreement (PTA). The current PTA, signed in September 2012, defines price stability as annual increases in the Consumers Price Index (CPI) of between 1 and 3 percent on average over the medium term, with a focus on keeping future average inflation near the 2 percent target midpoint.
Wheeler is using the OCR to create inflation.......this ensures that the price stability of annual increases in the CPI are met.........it is deflation that is feared.....
Unfortunately there has been very little debate in NZ on deflation due to those damn house prices continuing to climb.......house prices appear to be off-setting deflation in other areas......not quite to the required percentage that Wheeler would like........hence the raising of the OCR..........Wheeler couldn't justify another OCR hike last round as that would have placed NZ way out of kilter with other countries.......hence his interferring in the NZD......real nice when you say you're doing it for the exporters......sounds like a special favour...the RBNZ cares about you........the fact is the RBNZ will do anything to maintain price increases between 1 and 3%........
It's a Bulls vs the Bears in the market.......and the Bureacrats and Pollies trying to manipulate the hell out everything they can.
... personally , I take my financial advice from the colossus of economics on Radio Live , who has been telling us for some time now , to fix our mortgages ASAP ... interest rates are on the way up , and can only go higher ...
And who amongst us could argue against the great Duncan Garner !
... booked the mechanic for tomorrow afternoon , to fix the break on my mortgage ...
Big Daddy you are right. We are at the start of a property price boom, migration surge, lower swap rates, economic strife in the USA and Europe/China will see fixed interest rates drop to levels we have never seen before.Wheeler will have no choice but to slash the OCR to keep our dollar down.Combine this with the OBR rules where money invested in banks could suffer a haircut and it is likely that more people will buy a property. Those who fixed recently will regret it and sad to say the machanic advice is flawed.
In the short-term, prices will more than likely go up. To sustain these prices, we need to keep sending more and more money to our Aussie bank overloads. Eventually, this will case a recession as money that would have gone to the productive economy is diverted to unproductive interest repayrment. Then follows a house price bust.
Unless you are planning for very long-term investing (20+ years), you should steer clear of housing. Otherwise good luck trying to time an illiquid market.
Economies are not a closed loop, the productive sector is also forecast to grow and both the productive sector and the investment sector will receive FDI. To use your Aussie bank example, there will be Kiwi's who hold Aussie bank shares either directly or indirectly (through managed funds) and they will receive income from those shares, an injection into the NZ economy.
The most important inflow to consider is the money supply or M3, where money is literally printed from thin air and pumped into houses (when people take mortgages). In a growth and debt based economy inflation becomes systemic; governments these days go as far as printing money to ensure inflation continues.
"how many Kiwi's own these bank shares (out of 4million of us). Where are they likely to be located, and what size holding are they likely to have?" - I'm not going to spend hours researching ownership of each and every aussie bank share; my point was simply that capital flows into and out of economies. Whilst at the same time we print money/debt from thin air and pump it into houses which ensures house price inflation. Houses today are more than they were 20 years ago, and more again than 50 years ago, and more again than 100 years ago, and more again than 150 years ago, and so on and so on. You get my point; when the whole system aims for growth and aims for positive inflation; prices in essentials (like land) will go up, it becomes systemic.
The only thing that will change the never ending upward spiral is a change in the very fundamentals of our economies.
And I don't expect to to need to research each and every aussi bank share.
My point is that the dead capital in shares just sits there, but the revenue stream that goes into the bank comes from a large number of Kiwi's, either directly or once or twice removed.
Yet the dividend payout, and even the wages, are what ... limited to 10,000 holders? good ballpark figure to work with. The billions in capital...maybe 200mill is held by NZ, over less than 10,000 kiwis, probably 90% of that capital holding is by 5% of of the NZ investors. So a good dividend payout that represents a 5% (average savings cash removed, and interest extracted) from 4mill people, only significantly benefits 500 Kiwi's. and even then only at a fraction of the spending power removed from the NZ economy
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