New Zealand's second largest home loan lender changes two rates, grabbing a large advantage over its rivals for an 18 month term with a rate lower than just about everyone else

ASB has changed mortgage rates for two fixed terms, one up, the other down.

The headline change is to their 18 month fixed 'special' which has been cut by -16 bps to 4.39%.

That makes it the lowest rate for that term from any bank (except HSBC Premier), and by quite a margin. It beats TSB's 4.65% - the next lowest rate - by 26 bps. It beats BNZ's 5.05% - the next lowest main bank rate - by 66 bps.

In fact, 4.39% is the lowest rate for any term from any bank, other than from HSBC Premier.

However, at the same time ASB has raised its two year rate to 4.65% matching all its main rivals for this term. For ASB, that is a +6 bps rise.

These rate changes also apply at Sovereign.

We should also note that yesterday, swap rates stook a tumble following the unexpectedly weak CPI data for December. In fact, the one year swap rate fell to 1.97%, its lowest level on record.

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 January 22, 2018 % % % % % % %
               
4.99 4.45 5.15 4.65 4.99 5.89 6.09
ASB 4.95 4.49 4.39 4.65 4.89 5.39 5.59
5.35 4.59 5.05 4.65 4.99 5.89 6.09
Kiwibank 4.99 4.45   4.65 4.99 5.65 5.69
Westpac 5.25 4.59 5.15 4.65 4.94 5.89 5.59
               
4.80 4.49 4.69 4.69 4.99 5.39 5.59
HSBC 4.85 4.19 4.19 4.29 4.89 5.29 5.59
HSBC 4.99 4.44 4.69 4.69 4.99 5.49 5.69
4.85 4.44 4.65 4.64 4.79 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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23 Comments

One can just about hear the collective sigh of relief from the Auckland mortgage holders (especially those with $500,000 plus) that interest rates are not heading north at least in the short term outlook.

Yeehaa

Only because the economy is heading south which is a pity. Labour will stimulate it in due course as they all get back to work and up to full speed.

Of course the economy is heading South, what else do you expect with the spend, spend, spend new government?
Any company or household would be heading South too if they spend more than they earn

Your view here seems quite unusual - you think lots of spending presumably based on government borrowing would lead to an economic slump right now? You don't think the extra money pumped into the economy would stimulate it? Long term impacts of interest costs are another issue, which wouldn't really have a noticeable impact for a few years.

On the other hand - the cancellation of tax cuts means the Government may be spending more, but it is also earning more to at least partly compensate for this. Additional spending is required to build public services back up to a reasonable funding level after a slow strangulation of funding under National while also significantly increasing the population requiring services.

Come on mfd.....you have to be joking? Or maybe you are a follower of Saul Alinsky and his Rules for Radicals...How to create a social state. Control Healthcare - yip we have heard the blurbs don't have salt, fat butter, sugar, you must have this injection and that pill etc, Increase Poverty so people are reliant upon you, Increase debt to an unsustainable level that way increase taxes which produces more poverty, Remove the ability of people to defend themselves - the state and its socialist supporters know best BS, Welfare control by having every aspect of a persons life covered - food, housing and income etc. Indoctrinatation through controlling the education system, Class warfare by dividing the people!

NZ public services are living beyond their means and that is why people are falling through the cracks.
The public services are overfunded and have a low output which means they are basically lazy and not puling their weight in this country.

Government spending is a cost to the primary tax generators. Socialism is a failure which increases poverty.
A givernment cannot spend more than the primary tax generators can produce. Economic failure will follow if they do so.

Socialism is not putting the socialists money on the line it is putting someone else's money on the line. It is a manipulative system create by cowards for cowards for their personal greed.

Socialists always bite off the hands that feed them causing an economic crisis they just can't help themselves. So expect economic decline......because if this coalition keeps up its disgraceful lack of mathematical skills there is nothing left other than decline!

I think you've deviated slightly from the point I was making. Agree that many public services are living beyond their means - this is why funding needs to be increased to prevent a collapse. To me, socialism is like a huge insurance scheme - we all pay in and claim as needed, so the services will be there for you when you need them.

These services (education, health, security etc) are all needed and all need paying for somehow, I'm quite happy to pay a decent wedge of my income to ensure fellow humans don't live in pain and misery. Most countries (certainly successful Western countries) are socialist to varying degrees and all have had an incredible economic run over the last few decades and have a very pleasant quality of life. You need to worry less, life is good.

Wow your left me confused. I'm sure you mean to deride the current government but your whole rant seems to relate best to the previous one.

I can't see how you judge this govt as worse than National were notaneconomist. National sold 49% of our power generation, borrowed about 50 odd billion dollars, filled the country up with people and gave insufficient funding for extra police, education, health or infrastructure. Evan I could run a rock star economy if I had that budget while covering no costs.

mfd, you ask:
"You don't think the extra money pumped into the economy would stimulate it"
Have you ever wondered where that extra money comes from? The current government certainly have no idea

Well, yes I have. That's why in my post I gave two possible answers - borrowing and the cancellation of National's proposed tax cut. Borrowing would at least temporarily pump up the economy. Not clear cut whether redirecting money from tax cuts to spending will boost or hinder the economy immediately. What do you think the source of the extra money will be and how will that cause the economy to head South right now as you seem to believe?

Yvil - is it your understanding that the National government was saving more than it was spending? If not, why the long face?

" Of course the economy is heading South, what else do you expect with the spend, spend, spend new government? Any company or household would be heading South too if they spend more than they earn."
Like the USA??????

No one could have known how much labour’s policies would drive up rents! As I recall it under national landlords were already charging the maximum that they could because rents were limited by wages. Labour’s ability to break past this limitation is indeed spectacular! It looks like this government will create opportunities for the savvy to make a lot of money :) https://i.stuff.co.nz/business/property/100721723/whats-squeezing-the-li...

Every year at this time we see the same article about massive demand for rentals and landlords significantly increasing rents. Yet it never seems to show up in the real stats.

Push your banks hard people. Just got 4.15% for a year. 900k

Not good enough. with this amount of loan, 4.1% is the maximum plus cash back.

Westpac - $1.1m at 4.3% for 2 years with $8k cashback.

So your paying the bank over $37,000 each year in interest.
Wish I was doing that.
Not.

Don’t be silly my tenants are

Do you guys just have one big mortgage or have multiple smaller mortgages maturing at different times? I have multiple mortgages maturing at different times an I am wondering if this makes it harder or easier when it comes to negotiating?

I think it makes it harder to negotiate rates as they know if you leave you will have break fees. It’s a balance between negotiating power and security for you. I have 3 properties and 2 mortgages

definitely harder - i had some really nice deals for a couple of years - but then felt i was getting short changed after that - so i then moved everything into very short terms and allowed them all to basically mature at the same time - and then took teh package around to other providers - net result my bank finally started to offer the rates i felt i should get -

Its swings and roundabouts though - as i just got a payout from EQC for landslip damage - and would love to have parked it in an orbit facility whilst i arrange the work - which could take several months to get done - but i only have a small 30K orbit and everything else is fixed - so you lose some flexibility with a one major loan or most of your money being fixed at 2 years -

so i have two rentals both with one mortgage each and then two mortgages and a small orbit on my home property - one interest only - the other repaying about 5K a month - feels good as that was over 230K and will be gone in under 3 years - i prefer to see that sort of impact as opposed to repaying small amounts on several loans