Hard on the heels of changes by Westpac and TSB earlier in the week, BNZ strikes with a market-leading low one year 'special' home loan rate

BNZ is the latest institution to cut a mortgage rate.

Effective Friday, February 9, their new one year fixed term interest rate is to be 4.39% for their Classic offer.

That will make it the lowest one year rate from any bank except the HSBC Premier offer.

At 4.39%, that matches ASB's eighteen month 'special' rate which was introduced two weeks ago.

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

For a one year fixed rate, BNZ has an advantage of -6 bps over ANZ, Kiwibank and Westpac, and a -10 bps advantage over ASB.

There are no other home loan rate changes from BNZ at this time. But there may be savings or term deposit rate changes announced by them tomorrow.

BNZ Director of Retail and Marketing Paul Carter says current rates are "some of the lowest interest rates in a generation and the economic outlook indicates that may continue for most of 2018."

Yesterday, Westpac cut its one year rate to 4.45% from 4.59%, bring its one year offer more into line with their main rivals. Earlier in the week, TSB moved off its 4.44% one year rate, raising it slightly to 4.49%.

And Kiwibank is now offering $2,000 cashback in a reprise of an earlier mortgage market incentive.

Today's change comes after the RBNZ decided to leave official rates unchanged. They also signaled that the next official rate change could go either way, but current official positions will remain in place for a considerable time yet.

After today's RBNZ announcement, wholesale swap rates are unmoved.

Short-end wholesale rates have been fairly stable even as long end rates have been very volatile in international markets.

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 4.39 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 4.45 5.15 4.65 4.94 5.89 5.59
               
4.80 4.44 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 4.49 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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8 Comments

Could it be argued that Kiwibank are offering the best 1 year deal currently, with cash back one could purchase a few more pairs of shoes for those heals.

Interesting that despite all the talk about our tightening Labour market, rising minimum wages, upcoming inflation, overseas rates increases, NZ Banks are still lowering their rates

Trying to lock as many people in before things go upwards?

The low sales volumes has effected the lending growth across the banking sector meaning that banks profits are likely to suffer. And we all know how much the banks like to grow their profits...

Its a bit of a fight to get whatever they can, as customers are not exactly knocking the door down at the moment.

Inevitably the interest rates will go up as off shore funding costs increase based on international rates increases

"If banks were out of the picture people would still buy and sell but at that lower price that people can "afford"."

Sorry to disappoint but interest rates will not be rising very much at all,if at all!
We have had the so called experts talking about rises for years and that’s right, they have been wrong every time.
With the world sharemarket experiencing a bit of a dip there is no reason and logical that there won’t be much in the way of increases.
“The Man” stated this a long time ago despite several on here saying that they would be a lot higher by now.
I do not consider myself an expert at all. But I must confess that I have always been right in the past, and that is all you can go on isn’t it?
Why would the U.S. want to increase rates to slow things up over there?
Rates are down for the long term and ours are actually quite high compared to overseas!

I suspect we are on the verge of two scenarios. Rising interest rates around our little planet or a major world recession. Either one will have an enormous impact on house prices in NZ and it will not be up.