BNZ follows ASB by hiking its 3 year fixed 'special' mortgage rate. This follows steady wholesale rate rises and sticky term deposit offers

BNZ follows ASB by hiking its 3 year fixed 'special' mortgage rate. This follows steady wholesale rate rises and sticky term deposit offers

BNZ has followed ASB and raised its fixed three year 'special' mortgage rate to 4.59%.

This is a rise of +10 bps.

It did not change any other rate, including no change to its standard rates.

It follows continuing rises in wholesale swap rates, especially for terms of 3 years and longer.

In fact, after bottoming out at 1.96% on August 16, swap rates for a 3 year duration have risen by +39 bps to today's level of 2.35%.

Also impacting bank funding is the sticky level of term deposit rates, which had not fallen like the wholesale markets.

On Friday, ASB raise most rates for fixed terms of threes years and longer.

One or two other banks have still to review their long-term mortgage rates and the scene is well set for them to hike as well in the coming days.

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

A snapshot from the key retail banks is:

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 4.29 4.29 4.34 4.59 5.09
4.99 4.29 4.99 4.39 4.59 5.15
Kiwibank 4.75 4.29   4.29 4.39 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 4.19 4.49 4.99
HSBC 4.50 4.25 4.29 4.29 4.35 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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0.10% increase!? So what. Theres no trend here. Just bumping along the bottom. Rates low for another 10 years plus

Have you thought of becoming a economist Simon?

Nah I like being right and making money too much.

Yes your predictions on Plamy North Real estate are spot on...should have purchased a few years back.

Yeah unfortunately the best buying is gone from there now. Had a good long period where buying was fantastic though, 8% yields, and now decent capital gains. Probably keep going higher as still cheap relative to other cities but harder to find really good deals these days and I'm finding it much harder to find something I'm that excited about buying. Only cities/towns that are cheaper are smaller with declining population so I wouldn't go chasing yield in any if those (wanganui, gisborne etc). Anything in Palmy yielding 6% plus would probably serve you well, of course as prices head higher good yields are getting harder to find...

and now descent capital gains

Not sure if Freudian slip, or casting shade on the expected state of the Auckland property market...

Well there is a usa election and an OCR in the next couple of days.
Offshore borrowing has increased but heck - seems to me to be standard practice by the banks to spook people into fixing so the banks know 100% their own fixed income especially if they know the OCR rates are going to be falling. Lock those suckers before the rates drop.
They did pull off a really good game of don't blink last time the rates dropped and managed to not pass on the change to borrowers but none of them have the golden eye and once OCR reduction is past onward in whole or portion by one (maybe even kiwibank) the rest will follow.
So of course they are raising (fishing) their 3 yr fixed loan 10 basis points

President of Property

Maybe they are raising them, so they have a bit of room to then drop them after the OCR drop. But they haven't raised deposit rates, so looks like they will be making more profit from it.

Am i wrong in thinking that floating rates should be lower?

I am floating at 4.54% and have no desire to fix for 3 years at 4.59%. Once the game playing by the greedy bankers is over we will see interest rates, both fixed and floating, commence the downward slide - lower for longer for sure!

Bigblue - swap rates are up over 30bps in recent weeks, and will continue if/when Fed hikes 14-Dec, & NZ spreads over US rates a quarter of where they were at the start of the year if they do, banks funding costs have risen significantly as has their cost of capital and are currently not only raising margins but also starting to ration credit, some tentative signs that inflation globally is a bit higher than market and central bank's earlier expectations, worldwide commentators and even central bankers now admitting that monetary policy may have gone too far...brave man that ignores a very clear trend and relies upon another crisis to try to prove themselves right - and even then, what's left to cut offshore - even more negative ? Certainly pray for Trump, he's one hope for you in the short term, but longer term, your undoing.

When housing 'wealth creation' leads to national wealth destruction
http://www.abc.net.au/news/2016-11-07/gen-y-struggles-to-buy-a-home/8002288

I personally think we say the swap rate in NZ bottom out a few months ago. Assuming Hilary gets in we will interest rate hike next month in US. Yes interest rates can't rocket up beyond 5% for obvious reasons but the Aussie banks are on negative watch from S&P and so not willing expand mortgage books to protect balance sheets so they are increasing their margins. If I had a mortgage there is some sense in fixing it at this point imo.

The banks are actually acting in a fairly sensible way at the moment making sure they have strong balance sheets in preparation for any downturn.

Has anybody tried the BNZ TOTAL MONEY mortgage?

Yes - I have used Total Money in the past and found it saved me a not insubstantial (sorry about the double negative) amount of money. For the last part of my mortgage I was paying no interest as the amount of my savings exceeded the amount I owed ( I had - and still have - a reasonably sized "emergency fund" ). While you don't get any interest on your savings - you are not paying interest on (part) of your mortgage either. So I was paying principle only. As it is a floating mortgage you can also make lump sum payments (which is how I paid my mortgage off in the end).

Thanks for that.Seems like an interesting option.

Thanks for that.Seems like an interesting option.