Kiwibank takes advantage of stable short-term wholesale rates to offer the sharpest one year rate in the market, but responds to wholesale rises at the longer end with hikes

Kiwibank takes advantage of stable short-term wholesale rates to offer the sharpest one year rate in the market, but responds to wholesale rises at the longer end with hikes

Kiwibank has changed fixed mortgage rates, responding to rising wholesale swap rate changes.

It is reducing its one year 'special' rate by -10 basis points to 4.19%, making that the lowest carded, or advertised, one year rate among any of the large banks, and equal to the HSBC Premier offer (but without the Premier limitations).

TSB Bank also has a 4.19% rate, but for two years. Plus the TSB Bank offer comes with "up to $2,000 cash".

It is increasing its three 'special' year rate by +26 bps to 4.65%, and removing itself as a hotly competitive option for this term.

The bank's lifting its four year rate by 20 bps to 5.10%, and it is increasing its standard five year rate by +21 bps to 5.20%, leaving Westpac as the bank with the lowest rate offer for this term.

These changes follow the sharp rises in wholesale swap rates for terms of three years and longer. These rises have however been absent from the one year duration, which allows Kiwibank to make today's cut.

Similar changes apply to the white-labelled AMP Home Loans channel.

And today (Wednesday), we have seen further rises resume in wholesale rates, following yesterday's minor retrenchment.

These changes follow earlier hikes for longer term fixed rates by BNZ and ASB. The Co-operative Bank also raised some longer rates earlier this week.

The Co-operative Bank also raised some of its term deposit rates, but that is not something Kiwibank has announced so far today.

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 mths  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 4.19   4.29 4.65 5.20
Westpac 5.15 4.25 4.95 4.29 4.49 4.89
             
4.65 4.39 4.45 4.45 4.79 5.19
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 to the above table, BNZ has a fixed seven year rate of 5.55%, while TSB Bank offers a fixed ten year rate at 5.75%.

How long these very long term BNZ and TSB Bank rate offers can last must surely be in question.

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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Still can get cheaper if you negotiate plus cash

Can you tell me where to go for a better deal?

Hi, the banks will offer you some really good deals if you push them. For example, our bank offered us a cash bonus if we fixed at 4.19 for two years. We have been with this bank for 10 years. Negotiate, as the banks have wriggle room and prefer to maintain their customer base!