Following two other banks, the Co-operative Bank raises a number of its mortgage rates as term deposit rates turn higher

Following two other banks, the Co-operative Bank raises a number of its mortgage rates as term deposit rates turn higher

The Co-operative Bank has raised five key home loan rates.

It has raised its six month fixed home loan rate by +15 bps to 4.65%.

It has raised its one year fixed home loan rate by +14 bps to 4.39%.

It has raised its 18 month fixed home loan rate also by +16 bps to 4.45%.

It has raised its two year fixed home loan rate by +10 bps also to 4.45%.

And it has raised its fixed three year home loan rate by +10 bps to 4.59%.

These new rates will be effective on Wednesday, October 5, 2016

After these changes, this means that SBS Bank will now have the lowest bank rate for a fixed six month term.

It also means that the Co-operative Bank will have the highest mortgage rate for a fixed term of both one and two years.

And apart from ANZ which has the highest three year rate, it has the next highest rate for that term.

These changes come hard on the heals of some sharp rises in wholesale swap rates in the past few days, and follow some mortgage rate rises announced by Kiwibank and BNZ earlier this week.

But the real driver in this case seems to be the higher term deposit rates.

A spokeperson for Co-operative Bank says they are responding to term deposit pricing that has become entrenched at higher levels and "show no signs of easing anytime soon".

"Deposit pricing at 3.6% and above renders the current fixed mortgage rates unsustainable in our view," he said.

"We will revisit this mortgage pricing in the event term deposit rates fall."

See all banks' carded, or advertised, home loan rates here.

below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs   5 yrs 
  % % % % % %
4.99 4.25 4.89 4.29 4.99 5.30
ASB 4.75 4.25 4.25 4.29 4.34 4.79
4.99 4.29 4.99 4.39 4.49 5.15
Kiwibank 4.75 4.24   4.24 4.34 4.99
Westpac 5.15 4.25 4.95 4.29 4.49 4.89
4.65 4.39 4.45 4.45 4.59 4.99
HSBC 4.85 4.19 4.19 3.79 4.49 4.99
HSBC 4.50 4.25 4.15 4.15 4.55 4.99
4.75 4.25 4.35 4.19 4.59 4.99

In addition, BNZ has a fixed seven year rate of 5.55%, while TSB Bank offers a fixed ten year rate at 5.75%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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How effective are OCR cuts going to be now? Seems like weve hit the floor and the RB is out of bullets.

Is this the turn of the tide ?

Says the increasingly nervous man for the 7th time

The OCR for some time has had little effect on the exchange rate. In spite of the RB signalling an imminent cut to the OCR both deposit and mortgage rates are now rising. So it seems the RB has also become impotent in setting interest rates

Time to realise we are a very small country bobbing around on the big ocean of speculative capital. Is the tide about to go out?

Is there any better example of how little impact the OCR has on anything.

Banks are now raising and lowering rates completely independent of any RBNZ changes.

The last six OCR cuts have not had any real effect on exchange rates, but certainly helped fuel the housing price escalation (lowest residential mortgage rates in 60 years) and forced deposit rates to savers down by 40% or more. There have been a few minor adjustments to some term deposits in recent weeks, but nothing compared to previous drops in savings interest - particularly for on-call accounts and so-called bonus accounts of various kinds.

There is no reason to believe that further OCR cuts will do anything other than put savers at further disadvantage.

What will be telling is what input the RBNZ responds to. If it's only inflation going negative that's one thing, but if the OCR goes down if the housing bubble looks like it's faultering that's something completely different.

The Reserve Bank's "Core Funding Ratio" requirements mean that they can (put simply) only lend based on retail deposits, or long-term multi-year wholesale market funding. They cannot borrow from the Reserve Bank at the OCR to provide mortgages. Since mortgage demand has grown, yet deposits have not grown and the cost of wholesale long-term market funding has risen, therefore mortgages rates must rise regardless of the OCR.

It's one bank people...if the move went the other way you'd all be exclaiming that everyone is going to be pitching sub 4% rates by Xmas.

Rates started rising since July after they hit the floor between 3.99-4.05 across the major banks. BNZ who was previously most competitive have just raised their rates 20 bps across all terms (this is at the mortgage broker level). Banks are holding onto more margin, are purposefully not competing between each other and have raised TD rates to attract more local capital.

Just read something that gives me the shivers.See below:
Resimac(a non-bank lender) has received a massive increase in mortgage applications.That doesn't surprise me with the LVRs in place but what does is that they're still lending 80% and their funding is "residential mortgage backed securities".I didn't know what this was so I looked for a definition.This is what I got:
Residential mortgage-backed securities (RMBS) are a type of mortgage-backed debt obligation whose cash flows come from residential debt, such as mortgages, home-equity loans and SUBPRIME MORTGAGES.
If this company and other non-bank lenders are doing what I think they are.......the 1987 share market crash is going to look like a picnic!!


What I am seeing/hearing that screams 1987 to me is the number of advertisements for investment companies, NZ Invest etc and now much more recently we are seeing the re-emergence of these "life coaches", one is even called Robin Banks for crying out loud, he and Don Ha seemed to have teamed up. These people are now trying to drag the investment greenhorns into this ponzi, probably running out of alternatives. They all sound more like alarm bells to me.

Very, very ominous. Take away all this imaginary bubble scam bullshit, and what's left that you could call a real economy?

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