ASB challenges its main rivals with a new rate lower by -24 bps, tweaks some of its standard rates down too

ASB challenges its main rivals with a new rate lower by -24 bps, tweaks some of its standard rates down too

ASB has become the latest bank to tweak its rates and all today's changes are down.

It has matched rivals BNZ and ANZ with its six month fixed rate, adopting the 5.59% pricing point. That is a reduction of -21 bps.

It has dropped its one year fixed 'special' by -24 bps to 5.35% and this now becomes the lowest rate for that term of any of the main banks. However it is not as low as the recently announced 5.20% rate from HSBC. And the Cooperative Bank also has a lower one year rate.

ASB has made no change to its 5.99% eighteen month standard rate or its 5.39% two year 'special' but it has cut -30 bps from its three year standard rate. Its three year 'special' remains at 5.39%.

It has cut -40 bps from its standard four year rate to become 5.99% (it does not have a four year 'special').

And it has cut -50 bps from its standard five year rate but left its five year 'special' unchanged at 5.65%.

The net result of todays changes are minor and technical, except for the competitive positioning for its new one year 'special'.

ASB's fixed rate 'specials' apply to customers who have at least 20% equity (that is, a Loan to Valuation Ratio of less than or equal to 80%), have their salary or wages credited to a main transaction account with ASB and one other ASB product.

Wholesale rates have been declining recently at the shorter 1 - 3 year end. However they have shown some sustained rises in the 5 to 10 year terms recently.

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 compare at 8am Friday, May 22, 2015:

below 80% LVR 1 yr 18 mths 2 yrs 3 yrs 4 yrs 5 yrs
             
5.59% 5.55% 5.39% 5.59% 5.75% 5.79%
ASB 5.35% 5.99% 5.39% 5.39% 5.99% 5.65%
5.49%   5.39% 5.55% 5.65% 5.75%
Kiwibank 5.39%   5.39% 5.39% 5.99% 5.60%
Westpac 5.99% 5.99% 5.39% 5.59% 6.39% 5.65%
             
5.29% 4.99% 5.39% 5.49% 5.69% 5.69%
HSBC 5.20%   5.30% 5.40% 5.50% 5.60%
SBS Bank 5.59% 5.74% 5.35% 5.35%   5.35%
5.70% 5.80% 5.29% 5.40% 6.40% 5.85%

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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. An AMP360 mortgage broker can be contacted by following this link »
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Westpac tipped to be next with mortgage rate cuts.
Generally, an increase in borrowers seeking to break their year old or more longer fixed terms as these are now looking expensive.
By end of 2015 sub-5 rates for short term fixed terms may be the norm.
Calculate 400k at 5.99% compared to 5.34% on a 25 year term
Or 300k on floating 6.6% compared to a 6 month fix. This is a huge difference. The 6 month term is quickly rolled off, so is really a sluggish float.

The banks are probably already there to be honest. Our fixed rate mortgage (yes in the overpriced Auckland market) expires in a week. We've got offers from more than one bank at 5% for two years with significant cash contributions as well (which depending on legal fees and documentation fees of switching banks, gives us an effective interest rate offered of 4.5-4.75% per annum).

If they offered that to us, without us using a mortgage adviser or anything, they are probably already at sub 5% on 12 months to premium customers... one of them quoted me 5.15% for 12 months with $1k cash as well...

Thanks for the update Jay M.

What bank was that? Anyone esle got anecdotal material - particularly with the ASB as I have a fixed mortgage coming off next week and would like to match the 5 % rate.

Thanks for your feedback team.