Both ANZ and ASB have kicked off the week with good home loan rate cuts of their own.
And because they are two of the heavy-weight mortgage banks, their rivals will be taking real notice.
The most interesting change comes from ASB (and BankDirect, and Sovereign).
All their changes are for 'specials' that require at least 20% equity "in the secured property". There do not appear to be any other conditions.
ASB have added a "new" six month 'special', of 4.99% and the lowest of all the main retail banks. Only the newly-arrived ICBC has a lower six month rate of 4.89%.
ASB has also added a "new" 18 month 'special' of 4.69% which is the market leading rate for this term. No bank has a lower offer at this time.
Their new 4 year 'special' is 5.29%, also the lowest of the main banks, but not quite as low as HSBC's Premier 5.09%.
And their "new" 5 year 'special' is now 5.39%, also besting every other bank bar HSBC.
These set new low benchmarks, especially for the challenger banks who often rely of 'rate' without conditions to separate themselves from the heavyweights.
Consequently, further rate moves down should probably be expected in this market.
ANZ's changes on the other hand are more timid.
They have adopted a 5.39% six month fixed rate, no where near as good as the new ASB offer for that term.
ANZ's one year rate is -20 bps lower than their old rate at 4.69%, matching ASB and BNZ. This is a very good rate, but not as low as the HSBC Premier offer.
They have sliced -40 bps off their 18 month rate to 5.15% but even after this sizeable cut, it is undistinguished among its rivals.
And their new 2 year rate of 4.89% suffers the same comparison, matching ASB's 'special' for that term, but all their other main rivals have a lower offer on the table.
Wholesale rates are still falling. They are low enough to support these new low rate offers, and allow borrowers to negotiate hard for below-card rates.
The mortgage market is all about haggling, especially if you have at least 20% equity in your property.
Almost all home loan competition is now back focused on the interest rate. Non-rate cash incentives are still there for some banks (including Kiwibank) and while we thought they might disappear altogether, they haven't and they are still worth keeping an eye on. You can see see the current non-rate home loan incentives here.
The new floating and fixed mortgage rates compare at 5:00 pm today (Monday) as follows:
|below 80% LVR||Floating||1 yr||18mth||2 yrs||3 yrs||5 yrs|