ASB raises home loan rates, including its floating rate

ASB pushes mortgage rates up again for short terms. This change takes its floating rate much higher than its rivals

23rd Jan 17, 10:34am by David Chaston

ASB has also raised home loan rates today, including its floating rate.

At the same time, ASB has changed some term deposit rates, lowering its nine month rate, but raising both its three month and eighteen month rates.

The last time ASB changed home loan rates was on January 6, 2017.

The hike of the floating rate puts ASB at a pricing point significantly higher than any of its rivals. But it will be hoping they follow, as they all did after its January 6 changes.

ASB now also has the highest one year carded rate offer in the market.

Here is a way to see both changes from ASB:

	as at Dec 31, 2016	January 6 change	January 23 change	New rate Jan 23, 2017
	%	%	%	%
Floating rate	5.65	...	+0.15	5.80
6 mth fixed	4.75	+0.10	+0.10	4.95
1 year fixed	4.29	+0.20	+0.10	4.59
18 months fixed	4.45	+0.20	+0.10	4.75
2 years fixed	4.59	+0.20	...	4.79
3 years fixed	4.79	+0.30	...	5.09
4 years fixed	5.19	+0.30	...	5.49
5 years fixed	5.39	+0.30	...	5.69

ASB last changed its floating rate on November 25, 2016, raising it at that time by +10 bps.

Kiwibank also raised home loan rates today, as did the SBS Bank although SBS also cut its one year rate to a market leading level.

Today's changes don't alter who has the leading carded rates for mortgage borrowers. SBS Bank has joined HSBC Premier to lead for a one year term, TSB Bank has the market-leading offers for 3 and 5 year terms with HSBC.

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

A snapshot from the key retail banks is:

below 80% LVR	Floating	6 mths	1 yr	18 mth	2 yrs	3 yrs
	%	%	%	%	%	%
	5.69	4.99	4.45	5.05	4.75	5.49
	5.80	4.95	4.59	4.75	4.79	5.09
	5.79	5.25	4.49	5.05	4.79	5.09
	5.40	4.85	4.35		4.65	5.05
	5.65	5.25	4.49	5.05	4.79	5.09

	5.55	4.80	4.45	4.60	4.75	5.05
	5.59	4.85	4.19	4.29	4.39	4.69
	5.54	4.50	4.19	4.45	4.54	4.95
	5.54	4.75	4.25	4.45	4.49	4.69

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

TSB Bank has a ten year fixed rate of 5.75%.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

8 Comments

by MisterB | 23rd Jan 17, 10:52am 1485121953

Not sure your table is correct - BNZ floating rate per their website is 5.79% (not 5.64%) while ANZ site says theirs is 5.69% (not 5.59%)

by David Chaston | 23rd Jan 17, 11:33am 1485124414

You are quite right. Our error. Fixed in table above now.

by MisterB | 23rd Jan 17, 1:27pm 1485131253

Given that, is the headline "This change takes its floating rate much higher than its rivals" still accurate? Seems fairly much of a muchness to me.

by Boatman | 23rd Jan 17, 12:15pm 1485126942

Okay the banks are all "Turkey peeking" right now to see what the other banks are doing, and then boldly taking one tiny step before resorting to yet more hesitant Turkey peeking to see if another bank is brave enough to go further .

Are they hesitant to be out-of-kilter with their competitors ?

Where is the top of this cycle ?

Or are we going to see small but steady increases every week for the foreseeable future , and a whole lot of Turkey peeking ?

by ngakonui gold | 23rd Jan 17, 12:32pm 1485127979

Bring on THANKSGIVING.
That will put an end to TURKEY PEEKING.

by Boatman | 23rd Jan 17, 1:14pm 1485130446

LOL

by cmenezes007 | 25th Jan 17, 12:53pm 1485302013

The banks wants the people to fix their loans so they are unnecessarily increasing the floating rates because the fixed rates are going up. they borrow money from overseas in the wholesale market and if the interest rates in the wholesale market goes up than the fixed rates will go up. They dont want a situation in their balance with most of the home loans in the floating because the floating loan is always a liability in the banks balance sheet where as a fixed loan is always an asset in the balance sheet. Why is RBNZ not controlling the floating rates with the banks because the OCR is 1.75% and the banks are charging 5.90% the margin here is 4.15% which is not fair

by David Chaston | 25th Jan 17, 1:15pm 1485303308

Sorry but there are wholesale errors in your assertions. All loans by banks are 'assets' in a bank's balance sheet. Both floating and fixed, it makes no difference.

Secondly, claiming that a bank's margin is the difference between the loan interest rate and the OCR is plain wrong. Most readers of this website know that the banks don't borrow from the RBNZ at the OCR rate. Banks source their funding from many sources. You can find the details by checking the RBNZ Statistics resource.

And thirdly, you can hardly claim banks borrow from the RBNZ at the OCR rate while in the same breath claim the "borrow money from overseas". Most bank funding is from local sources. Look it up. Yes some of the major banks do borrow in international markets but it is hardly all of their needs. They have borrowed NZ$357 bln of which $157 bln is from NZ households. Much of the rest is from other NZ customers. According to S6 and S1, $120 bln is from "non-residents".

It is never wise to just make up bald, unchecked claims anywhere - certainly not on this website