Westpac makes second home loan rate change this week, matches BNZ with 4.39% for one year fixed. Rivals seek new ways to be competitive

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.

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 4.39 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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mortgage went floating with ASB end of January.....after emailing them at the end of October to start the renewal process (and free up some funds), they didnt even bother respond until 2 weeks before the end of our fixed term to ask us to renew, so thought better start looking around, as we have been with ASB for 8 years, and there certainly is plenty of helpful and friendly bankers out there at the moment, so im gonna sit tight for a little bit longer and see what happens....

Danish, it is costing you big money at the moment being on floating.

yep, i realize that, not gonna be floating for more than this month, and if ASB wants me to stay, they will reimburse that amount, as the way i see it, its their lack of communication that has caused it...so far, 2 other banks have already offered to pay legal fees etc. if we go with them, so im not overly concerned just yet...

Went from ANZ to Westpac, $1m borrowing fixed at 2 years at 4.3% with $8k cashback. ANZ low balled with same rate but only $2k cash back. Move was a pain in the proverbial for one day (signing etc...) but the $3.5k extra in hand after legal fees was worth it.

Great news!

Great news!

That's the response that the banks are trying to elicit. Next, they have transform that response into actual behavior.

Well I had 1 mortgage coming up for renewal in Jan and I have 2 more up for renewal in March, that's great news for me

Right. The banks want to either retain or acquire you as a customer. Win-Win. Win-Lose. Lose-Win. Lose-Lose.

The big prize is if they can squeeze greater amounts of debt from you.

They want to retain me, I've been a customer for 20 years and I have never missed a payment. I think it's win-win, the banks make money out of my interest payments and I make money with the money the bank lends me

It is a win-win, until it's a win-lose, lose-win (the lose-lose doesn't worth thinking about). All banks generally want to retain customers, but in the current climate, acquisition is also important because banks are compressing (relatively speaking) in the short term in an attempt to get you to switch and / or buy more debt.

I got 4.20 fixed 1 year with ANZ on 29 Jan

BNZ offered 4.19% and 2500 towards costs...

Danish, is that for an owner/occupied house or rentals.

Why are they pushing you to go so short.....

Why wouldn't you just bank with HSBC? Why choose a higher rate?