ASB targets a low 4.39% one year rate opening up a significant advantage over its main rivals. Kiwibank avoids rate changes, offers a free Samoa holiday with every qualifying loan

Following the dramatic new rate offer of 3.87% by HSBC for an 18 month fixed home loan term, ASB has responded targeting a low one year rate.

ASB has announced a new carded 'special' rate of 4.39% for 12 months fixed.

That is a reduction of -6 bps in what is becoming a very competitive mortgage market.

They won't be the last to announce lower rates.

Already we have had reductions announced by SBS Bank and BNZ.

ASB's new 4.39% one year offer is now the lowest of any bank for that term except from HSBC who have a 4.19% offer for their HSBC Premier customers.

This offer is now -16 bps lower than the rate offered by the largest home loan lender, ANZ. ASB is the country's second largest home loan lender, so it is unlikely that ANZ won't respond in some way.

Not all banks are responding with sharper rates. For example, Kiwibank is offering a free holiday in Samoa with every loan of $200,000 or more applied for by November 26 and drawn down by January 18, 2018. That includes return flights for two adults to Apia, flying economy with Air New Zealand on a Seat + Bag ticket, five nights in an Ocean View Room at Taumeasina Island Resort, with daily buffet breakfast for two, return airport transfers in Samoa for two adults, complimentary use of snorkel gear, kayaks and catamarans, and 1 GB of WIFI per day for two adults.

The Spring house selling season may be a challenge for both real estate agents and bankers this year because the suggestion is that transaction volumes will be relatively low. Winning market share off rivals may be the only way business plan budgets can be achieved.

These changes come as wholesale swap rates start to rise again. More rises in these base rates are expected today following Wall Street's moves at the end of last week.

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

Here is the full 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 
as at October 1, 2017 % % % % % % %
               
4.99 4.55 5.15 4.69 4.99 5.89 6.09
ASB 4.95 4.39 4.60 4.69 4.99 5.49 5.69
5.35 4.59 5.05 4.69 5.09 5.89 6.09
Kiwibank 4.99 4.55   4.65 5.09 5.75 5.99
Westpac 5.25 4.59 5.15 4.69 5.09 5.89 5.59
               
4.80 4.55 4.69 4.69 4.99 5.55 5.75
HSBC 4.85 4.19 3.87 4.29 4.89 5.29 5.59
HSBC 4.99 4.59 4.85 4.69 5.09 5.49 5.85
4.85 4.55 4.65 4.69 4.99 5.55 5.69

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

And TSB still has a ten year fixed rate of 6.20%.

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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10 Comments

Scoop those rates up while you can. Make sure your are positioned so that a $100 increase in your mortgage payment would make you go broke.

Well its now clear from this that Kiwibank cannot afford to give margin away .

Tighter margins on the way for banks.

At 0.5% more than HSBC's 18 month rate its hardly that amazing.
Why are 5 year rates so high still?

And for only the second time in 9 years our bank phones today to ask if we would like to move our mortgage from floating to 1 year fixed.

I hate the idea of "giving away" a holiday if you get a mortgage. I think it's wrong. Clearly, if you get a new mortgage, you will have higher expenses and, while the trip is on the bank, you will still spend more during your holiday. To me, it goes against financial responsibility.

Whatever happened to the set of steak knives?

Other banks? Westpac? Where are your mortgage rate cuts?

I think there is some margin in the 4.39 and 4.69 for banks based on some recent rates Ive received

Why is HSBC about 1/2 a % less than the Ausie /NZ banks? Why can't they compete? If I wasn't fixed I would jump.
Does anyone using HSBC recomend them? are they easy to use? No problems?