Today has brought what now is a rare home loan rate change.
They have been notable by their absence recently.
SBS Bank has trimmed three fixed rates.
It has reduced its 18 month fixed rate by -16 bps to 4.69. This makes it more competitive for that term, but this new rate is not the lowest carded rate on offer. ASB has a 4.60% offer, TSB has a 4.65% and HSBC's Premier offer is priced at a market-leading 4.19%.
SBS Bank has reduced its three year fixed rate by -10 bps to 4.99%. That removes it from being a market anomaly with a three year rate over 5% leaving BNZ sticking out in that way.
And SBS has reduced its five year fixed rate by -16 bps to 5.69%. This isn't as low as either Westpac or HSBC Premier who have a 5.59% offer for that term, but it certainly is competitive.
None of today's changes are market-leading by SBS Bank, but they do reflect where others are in pricing rates for those terms.
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. We will see just how low when the REINZ releases its October sales data in the coming week. Winning market share off rivals may be the only way bank business plan budgets can be achieved.
There is clearly more residential property being brought to market as listings, and we are seeing a seasonal uplift in auction events. But actual transactions are clearly harder to agree. The new Government has not cleared away market uncertainty by committing to major supply-enhancing moves, especially in Auckland.
The market is so far away from the froth and exuberance of this time last year that the RBNZ is even sending signals that its LVR restrictions might be eased somewhat.
Across the Ditch, some banks are getting desp[erate in a declining market. The AFR is reporting that NAB (BNZ's parent) is bundling new credit card deals and 100,000 bonus points offers, which is enough for AU$500 in vouchers from major retailers. Adelaide Bank is to launch a no-fee 3.75% 'Smartfit' owner occupier rate for principal and interest borrowers with a 20% deposit. It's what happens in a zero-sum environment.
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 November 11, 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%.