The competitive instinct by banks is getting more intense for home loan business.
This afternoon (Friday, February 9, 2018) Westpac has matched BNZ's 4.39% one year 'special'. This is Westpac's second mortgage rate change this week.
That comes after a flurry of changes to eighteen month and two year rates earlier, others targeting a 4.44% rate.
And all the while, the drift lower gets closer to the HSBC Premier rate markers which have been the lowest offers in the market by some distance and for some time.
Now the difference between BNZ and Westpac's 4.39% one year rate and HSCB Premier's 4.19% is down to 20 bps and within the discount discretion that may be available at some institutions.
Further, Kiwibank has re-opened the advertised cash-back option with a $2,000 offer that will run until March 4, 2018.
Cash-backs had slipped off the radar, only used in the final stages of off-card negotiation in response to competitive pressures. But they are now back, on the table and above board.
This new round of visible public competition comes as re-sales activity in real estate markets are struggling to generate usual high-season volumes. That leaves banks with zero-sum options as far as achieving their planned mortgage book growth.
And that can only be good for borrowers who may be getting deals with finer margins.
Margins are being squeezed because wholesale interest rates are not really shifting at the short end where one and two year home loans are funded.
Even term deposit offers aren't undergoing structural shifts lower.
If you are in the market for a mortgage, or a rollover, now could be a good time to negotiate.
If you have completed a recent transaction, especially one where you ended up with a below-rate-card deal, we would love to hear about it in the comment section below.
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||%||%||%||%||%||%||%|
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%.