ASB has not been able to hold its higher two year fixed rate and has adjusted it down today (Friday).
Their website now shows its 2 year 'special' at 4.79%, a reduction of -5 bps.
It had raised that rate by +10 bps on July 7 from 4.74% along with hikes for their four and five year rates at that time.
Today's change does not include adjustments to those longer rates.
ASB's standard two year rate has also been reduced, by -5 bps to 5.19%.
Part of the space allowing this reduction will be a drop in wholesale rates. Since ASB last moved in early July, the two year swap rate has fallen from 2.33% to day's 2.19%, a -14 bps fall. But more generally, today's two year rate is actually only back to the range that was in place from mid-May to the end of June.
Amother reason for the drop might be that the mortgage market is getting very competitive in a zer-sum sort of way. Real estate transctions are falling fast, and mortgage volumes are likely to be following.
No compensating term deposit rate changes are reflected on their website this morning.
The same two year rate change applies at Sovereign, and at BankDirect.
Today's change sets ASB's two year rate the same as its rivals BNZ and Kiwibank and below the carded offers from ANZ and Westpac. It also matches the offer from TSB Bank, although no-one comes near the HSBC Premier rate.
We have not yet received a formal advice of the ASB reduction; it has only just appeared on its website. But we have received a formal advice of the change from Sovereign.
Here is a snapshot of the fixed-term rates on offer from the key retail banks.
|below 80% LVR||6 mths||1 yr||18 mth||2 yrs||3 yrs||4 yrs||5 yrs|
In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.
And TSB Bank still has a ten year fixed rate of 6.20%.