Going one further

Mortgage rate competition gets fiercer around the fixed one year offer with ASB now offering 4.30% as a carded 'special', below rivals who cut rates earlier in the week

15th Feb 18, 6:42pm by David Chaston

ASB has gone one further, lowering their 4.49% one year fixed home loan rate to 4.30%.

That puts it lower than both ANZ and Kiwibank's 4.35% rate for that term. And since the, the Co-operative Bank has also reduced its one year rate.

And the new ASB rate goes some way to covering Kiwibank's $2,000 cash-back additional offer.

This new offer is effective Friday, February 15 and as a 'special' it requires a minimum of 20% equity in the security property; that is, a loan to value ratio (LVR) of 80% or less.

And other ASB existing discounts do not apply to these special rates.

The last time ASB had a one year rate as low as this was in the first week on January 2017 when it was 4.29%.

This latest rate is now just +11 bps above the market-leading HSBC Premier rate for one year fixed

Borrowers are benefiting with deals at 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 by reducing term deposit rates can they protect those margins.

And sales of homes in the real estate market are stalled at volumes about the same level as a year ago - and prices are 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 February 16, 2018	%	%	%	%	%	%	%

	4.99	4.35	5.15	4.65	4.99	5.89	6.09
	4.95	4.30	4.39	4.65	4.89	5.39	5.59
	5.35	4.39	5.05	4.65	4.99	5.89	6.09
	4.99	4.35		4.65	4.99	5.65	5.69
	5.25	4.39	5.15	4.65	4.94	5.89	5.59

	4.80	4.39	4.69	4.69	4.99	5.39	5.59
	4.85	4.19	4.19	4.29	4.89	5.29	5.59
	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%.

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Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

23 Comments

by Cowpat | 15th Feb 18, 7:36pm 1518676575

So you want to negotiate new terms on that 2 year 80 percent interest only loan , and release a little equity Mrs Cowpat. As long as the property is not in Auckland , you appreciate Mrs Cowpat prices have not moved onwards and upwards in that time. Let me fill in the form , Remuera , Otago you say.
With monthly sales Auckland / New Zealand running at just 26 percent, the days of Auckland accounting for upwards of 44 percent of national sales appear but distant speculative memories. The banks will need to be more aggressive to obtain market share.

by Yvil | 16th Feb 18, 10:04am 1518728680

In my humble opinion, I think 2 years is not a good term to fix now. I say that because it is very very difficult to predict where interest rates will be in 2 years time and you could find yourself having to renew in 2 years time at much higher rates. I speak form experience when rates were going down and I had locked for 2 years, it cost me not being able to take advantage of the lower rates. (I realise it's the opposite of what could happen in 2 years time but it shows the problem of the 2 year timeframe)

by head_down_bum_up | 16th Feb 18, 11:05am 1518732317

Indeed, but if rates climb after a year and you need to fix again then missed out on a year of lower rates. Impossible to predict. Would be nice if we had 30 year terms like other countries so you could just lock in and budget accordingly. I'm still on 4.15 (2 years) that renews in Sept. If I only went a year I'd likely be on a higher rate already. And perhaps by Sept I'll be able to get 4.15 or near to it again from what rates look like they're doing now

by Yvil | 16th Feb 18, 5:40pm 1518756015

Agreed. My view is that I have a reasonable chance to predict rates in 12 months but a very low chance to predict 2 years ahead. I have several 1 year fixed mortgages that I stagger for renewal March, Sept & Decemb

by J.C. | 16th Feb 18, 5:49pm 1518756566

My view is that I have a reasonable chance to predict rates in 12 months but a very low chance to predict 2 years ahead

If you have any chance at all to predict anything, you need a foundation for forecasting. All you're saying is that the longer the time horizon into the future, the less secure you are to understand it based on what you consume from the media and how you think the world works.

by Yvil | 16th Feb 18, 5:59pm 1518757165

J C, many of your comments are very generalised and theoretical, I suspect you are possibly a student?

by J.C. | 16th Feb 18, 6:50pm 1518760233

It's actually more of a comment on behavior. You speak like you're predicting something with a level probability. But the reality is different. You're not predicting anything. Forecasting is very different to a "I reckon," which is little more than a subjective uttering. Nothing wrong with that and it's the basis of everyday socialization.

by Yvil | 16th Feb 18, 8:55pm 1518767728

I think you just answered my question, you're a theorician

by gingerninja | 16th Feb 18, 9:01pm 1518768103

Did you mean theoretician?

by TainuiBabe | 15th Feb 18, 9:02pm 1518681745

ASB is fighting for new business to help prop up it's parent bank CommBank because it has suffered a severe loss in confidence over the past few months. When Australia's largest bank turned a blind eye to no less than 52,000 fraudulent money laundering transactions taking place via it's ATM's nationwide in Australia and involved aiding and abetting gangs and their criminal proceeds from drug and gun running, then what do you expect? They need more business to pay their massive fines!

by Squishy | 15th Feb 18, 11:00pm 1518688806

All the banks are anxiously clamouring for a larger share of the pie now it's not growing as quickly.

by J.C. | 16th Feb 18, 12:05am 1518692756

One of the great things about the banking industry is that there is no shortage of "stock." In fact most people don't really understand that the "stock" doesn't necessarily exist; it can be "lent into existence."

by SmoKey | 16th Feb 18, 7:27am 1518719241

3.99% soon, any one ?

by head_down_bum_up | 16th Feb 18, 8:11am 1518721893

Unlikely, even when HSBC were lending at 3.99 no one else did.

Any stats on new loans being issued?

by David Chaston | 16th Feb 18, 9:53am 1518728010

RBNZ C30, C31, C32, C35

by Yvil | 16th Feb 18, 9:58am 1518728281

FYI, just this morning I have been offered:
4.19% fixed 6 months
4.19% fixed 1 year
4.45% fixed 18 months
Valid until COB 20/02

by Retired-Poppy | 16th Feb 18, 10:33am 1518730415

Yvil, given the growing risks of capital losses, wouldn't it be more prudent to pay zero interest? Can't see the point in paying interest on anything (other than the family home) that is depreciating over the longer term - right?

Lower interest rates are not a cause for celebration. They are more a warning signal.

by Yvil | 16th Feb 18, 5:42pm 1518756160

Thanks for your constant concern over other people's affairs R P, so caring of you

by PKchew | 17th Feb 18, 7:45am 1518806742

RP, Depreciation is a cost just like everything else associated with running a business (ie a rental business too). However for the latter, you have rental income as well. Because you cant claim depreciation as a cost for tax purposes, doesnt mean that you dont set monies aside to refresh your properties on an ongoing basis. This means that rents increases are needed to cover this cost (as well as other costs). Interest rates are just another cost to deal with. All have to be paid for from rent (if your running a rental business) otherwise you would lose money. Capital increases are not realized until you sell. And because most investors in property who are smart, invest for the long term IE never sell. So it becomes a cash business pure and simple.

by Cowpat | 16th Feb 18, 10:16am 1518729406

Currently turnover of existing Auckland housing stock has fallen below 4 percent. It would take some 27 years to turnover 'all ' available stock.(Once upon a time just 11 years. ) How accurate at present are median or mean prices on a monthly basis, or indeed are prices relevant at all. As turnover continues to fall this year , not only in Auckland but across New Zealand, there will be no need to jump at these initial bank offerings.

by PKchew | 17th Feb 18, 7:34am 1518806053

Because most property investors have cut their debt into smaller pieces and staggered their period of fixing across a range of periods, they can take whatever they can get at the time the fixed rate comes off for each of these pieces knowing that overall their total Debt interest rate is fairly consistent and takes advantages of dips, at the same time as "not having their eggs in the same basket" if interest rates rise.

by Retired-Poppy | 17th Feb 18, 8:39am 1518809958

PKchew, your either Ron Fong himself or a byproduct of his seminars. All hype and blow. This is the real world. When the tide goes out, its game over, your bank decides your financial fate. Being that you purchased all your seven properties post 2012, your investment strategy is everything but impervious to a slump! Your heavily leveraged and at this stage of the credit cycle, that's not smart.

by THE MAN 2 | 17th Feb 18, 8:49am 1518810563

RP, PKChew has had his properties for awhile and I would say he was not heavily leveraged!
Interest rates will not rise much at all.
We have 6 loans due up early March from the fixed interest rate and our interest repayments in those 6 loans will drop by over 20 %.
Our rents have not dropped by 20 % per cent so landlords will be better off financially.