Kiwibank has announced it is matching BNZ with a 4.49% two year fixed 'special' mortgage rate.
This comes after Kiwibank ended its $2,000 cash-back promotion, and after BNZ launched the same rate on Tuesday, March 6, 2018.
This is the most popular fixed term, and tightens the competition in a mortgage market that is operating in a dull real estate sales environment.
Barfoots in Auckland posted modest sales volumes in February, and the REINZ will report national sales numbers on Wednesday, March 14, 2018 and they are not expected to show strong volume growth.
RBNZ data also confirms that mortgage market value growth is also modest, with a fall-off in volumes to property investors, partly made up by small rises to first-home buyers. But that data is only out to January; the February data is not due until March 26, 2018.
The Kiwibank rate reduction is a drop of -16 basis points.
This new rate is the lowest two year rate by any major bank. But TSB has a lower 4.39% rate for that term, and HSBC Premier offers 3.95%.
Kiwibank last had a two year offer this low (4.39%) over a year ago on 10 January 2017.
Kiwibank 'specials' are only available when you have at least 20% equity in the property provided as security. Unlike other banks, they don't have transactional account requirements as a condition, and they do offer these 'special' rates for customers who use the Welcome Home Loan product.
The overall leader with the lowest two year rate is still HSBC Premier who burst on to the market with its sub-4% rate offer two weeks ago. HSBC Premier offers come with restrictions that are unusual in the New Zealand market.
Wholesale rates have been stable for durations of two years and less for all of 2018.
If you are in the market for a mortgage, or a rollover, now is a good time to negotiate.
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||%||%||%||%||%||%||%|
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%.