Westpac has announced a new low three year 'special' fixed mortgage rate of 4.94%.
This rate is lower than all other offers from all its rivals for this term, even its main rivals - except the offer from HSBC Premier.
The new Westpac rate is a reduction of -15 basis points, and the same change applies to the bank's three year standard rate.
Westpac has slightly tighter conditions for its 'specials' than most other banks. Westpac requires a minimum of 20% equity, salary credit to a Westpac transaction account plus one other Westpac NZ product, to be approved or issued prior to draw-down date. These special fixed interest rates cannot be used in conjunction with any other Westpac home loan offers or discount packages, including previously negotiated offers, legal fee contributions or the Westpac Choices Home Loan with Airpoints.
And these special fixed interest rates do not apply to loans for business or investment purposes.
Only HSBC Premier has a lower carded three year rate in the market at this time, at 4.89% which is just 5 basis points lower than the Westpac rate. Many borrowers will find the Westpac offer easier to comply with, however.
This is the latest rate reduction by banks competing for Spring home loan business. It is a tough environment this year, with house sales transactions particularly low.
ASB recently announced a sharp one year rate.
And ASB followed the dramatic new rate offer of 3.87% by HSBC for an 18 month fixed home loan term, which is the lowest home loan rate in the market, ever.
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 because transaction volumes are very 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.
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||%||%||%||%||%||%||%|
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%.