Westpac has taken the retail mortgage market lower with a sub 6% five-year fixed rate 'special' offer.
The bank also lowered two and three year rates, but only with their 'special' conditions.
In addition, we expect State-owned Kiwibank will join the trend on Monday with an even lower five year 'special', possibly as low as 5.89%.
This is the first time five year home loan rates have been below 6% since August 2013, and a few smaller institutions had sub 6% rates from June 2012.
We expect other banks to follow down into this territory.
Wholesale swap rates have been sinking fast recently although they did blip up a few basis points late in trading today.
But the trend is 'flat' - which means there is more room to lower rates at the five year end than for the one or two year terms.
These fast-sinking mortgage rates are undermining the RBNZ's rate lever potency. And there is not much they can do about it via the OCR.
That in turn will encourage the regulator to build non-rate tools to achieve its financial stability targets - using more and new 'macro prudential tools'.
The RBNZ will review the OCR next Thursday (January 29), although its statement will likely be very brief. The next full discussion of their thinking will come with the Monetary Policy Statement due on March 12.
See all banks' carded, or advertised, home loan rates here.
The current non-rate incentive offers are here.
This is how mortgage rates from the banks will probably compare as at 9:00 am Monday, January 26, 2015:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
5.59% | 5.70% | 5.55% | 5.99% | 6.49% | 6.59% |
 |
5.59% | 5.70% | 5.55% | 5.59% | 5.99% | 6.49% |
 |
5.69% | 6.09% | 5.75% | 5.59% | 6.49% | 6.59% |
 |
5.69% | 5.55% | 5.89% | 6.39% | 5.89%* | |
 |
6.09% | 6.30% | 5.79% | 5.89% | 6.79% | 5.99% |
| Co-op Bank | 5.59% | 5.59% | 5.59% | 5.74% | 5.99% | 6.25% |
 |
5.45% | 5.65% | 5.79% | 6.49% | 6.49% | |
| SBS Bank | 5.59% | 5.74% | 5.49% | 5.69% | 6.19% | |
 |
5.70% | 5.90% | 5.39% | 5.95% | 6.40% | 6.50% |
| * = possibly on Monday | ||||||
--------------------------------------------------------------
Mortgage choices involve making a significant financial decision so it often pays to get professional advice. An AMP mortgage broker can be contacted by following this link »
--------------------------------------------------------------
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.