BNZ's push for an expanded share of the mortgage market just became very aggressive.
The bank has unveiled a -30 basis points cut from its previous 4.99% two-year rate to 4.69%.
We think this is the lowest home loan rate for any term for a very long time. Some six month rates reached 4.85% in late 2012 and into 2013, and there have been rates this low for other terms since then. But no home loan rates have been this low since at least 1964 when the earliest RBNZ data is available.
Their new rate is now the lowest of any offer, trumping SBS Bank's 4.85% 18 month offer.
It is available to BNZ customers who have at least 20% equity in their property and who have a BNZ transaction account with salary or wages credited to the account.
BNZ is the one main bank who have the lowest market share in residential mortgages. They recently stated they would like to get their mortgage lending back up to levels their main rivals have achieved. They have abandoned their 'no-broker' position and are now driving to their goal with a low rate strategy.
Not only is today's two year rate miles below their competitors, they also have the lowest floating rate by a significant margin, using their Total Money product.
Supporting low rates, the wholesale swap markets are falling as well and are likely to fall further when they open this morning following significant reductions in New York in benchmark yields on Friday.
Almost all home loan competition is now back focused on the interest rate. Non-rate incentives have essentially dried up although there are still some worthwhile but targeted incentives available. You can see see the current non-rate home loan incentives here.
The new floating and fixed mortgage rates compare this morning as follows:
|below 80% LVR||Floating||1 yr||18mth||2 yrs||3 yrs||5 yrs|