New Zealand's largest mortgage lender makes a relatively unusual move (for them) to price its one year fixed rate below all its main rivals

The mortgage rate arm-wrestle has further to go.

Late on Monday ANZ announced a -10 bps reduction in its one year fixed carded rate, taking its 'special' down to 4.35%.

This is lower than the rates announced last week by both Westpac and BNZ who opted for 4.39% for that term.

The new ANZ rate is also lower than ASB's 4.39% eighteen month fixed rate.

And at 4.35% it is the lowest of any rate offered by any bank for any fixed term, apart from HSBC Premier's 4.19%.

But at this level, it comes with a sting for term deposit investors. ANZ is reducing their 3 month, six month and nine month rates by -5 and -10 bps at the same time. These new levels are below almost all comparative rates offered by all their main rivals.

The competitive instinct by banks is getting more intense for home loan business.

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. Only be reducing term deposit rates can they protect those margins.

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 February 12, 2018 % % % % % % %
               
4.99 4.35 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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14 Comments

Great news!

Get it? A key interest rate, because John Key??

All the banks are leap-frogging each other on the 1 year fixed rate at the moment.

ANZ Bank call centre going to The Philippines I read today.

Where did you hear this about the call centre? No source and I'd call this nothing more than idle talk from someone who doesn't know what they are talking about.

I just got 4.15% P.A for 1 year from ANZ.

So it's one collection team that was doing Oz work anyway. Not great to lose jobs, but not as sweeping as saying "ANZ Call Centre moving to Philippines".

Oh dear - is that the US10yr looking to have a go at 2.90%.

Best be careful - NZ means nothing in this game.

Yes, best be careful, never take a chance and wonder what could have been when you hit 60

Recent rates offered by the actual market leader: 3.99% for 18mths, 4.09% 2yrs

Presuming you're happy with no cash, no branches, poor online platform and being priced much worse when your loan drops under $500k.. so I've been told by friends.

Do you mean ANZ? if so is it for a new mortgage or renewal of an existing one? Thanks

HI Tom
Squishy is referring to an article that is out in the media and causing quite some debate.
Perhaps he's a bit more read that you gave him credit for.....

Yeah I'll accept I didn't give him much credit - Sorry!
That said, out sourcing a small team that deals with ANZ Australia customers is a fairly different claim than the contact centre moving to Philippines.

Got 300 k maturing Sep,300oct,570 Nov.what's my chances of getting as sharp a rate as these rates?