Both ASB and BNZ announce lower two year fixed home loan rates, although ASB does raise two shorter term rates

Two major banks have dropped their two year fixed home loan rate this morning (Friday).

Both are reductions from 4.65%, a level all five of them were at.

ASB dropped its 2 year fixed rate to 4.59%, a -6 bps reduction.

But BNZ has gone lower, dropping their offer to 4.49%, a -16 bps reduction.

That is the only change announced by BNZ. But ASB has raised two other fixed rates at the same time. Its 1 year 'special' is up +9 bps to 4.39%, and its 18 month 'special' is up +10 bps to 4.49%.

Neither bank announced term deposit changes to accompany these adjustments.

As a result of today's changes, Kiwibank has the lowest one year fixed rate offer among the larger banks and it is only bested by the offer from HSBC Premier.

Despite today's +10 bps rise, ASB retains the market leader position for fixed rate offers by big banks for 18 months (other than HSBC Premier's 4.19% offer and TSB's 4.39%).

And BNZ now has the lowest two year offer among the major banks, but is bested by HSBC Premier's 3.95% offer.

These come as wholesale swap rates are on the move up for terms of three years and less. Since the beginning of March the one year swap rate has risen from 2.02% to 2.15% with most of that increase happening in the past few days. The two year swap rate has risen from 2.19% to 2.29%.

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 March 23, 2018 % % % % % % %
               
4.99 4.35 5.15 4.65 4.99 5.89 6.09
ASB 4.95 4.39 4.49 4.59 4.89 5.39 5.59
5.35 4.39 5.05 4.49 4.99 5.89 6.09
Kiwibank 4.99 4.29   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 4.39 4.65 4.65 4.99 5.39 5.59
HSBC 4.85 4.19 4.19 3.95 4.89 5.29 5.59
HSBC 4.99 4.35 4.59 4.64 4.99 5.49 5.55
4.85 4.29 4.39 4.55 4.89 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 10-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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8 Comments

Why don't banks reduce the floating rate.
They can increase it at the drop of a hat so i don't understand why they are imo too high.

No one refinances for a lower floating rate. Banks want you on a fixed rate agreement.

Floating easy to change banks. If fixed in an environment with rising wholesale rates, break fees to switch banks, so tend to lock in customers.

Lowering the cost of money only serves to drive up house prices.

TTP

Tothepoint, you say lower interest rates make house prices rise. Well, not anymore. Its lax credit standards combined with a broad and sustained rise in personal income that would do that now. Were it to happen, the complete removal of LVR might have a small effect too. Interest rates could easily head lower from here but tighter lending standards will keep a lid on things as there's a glut of overpriced homes on the market - right now.

A perfect example of lax lending standards are the $500 Billion in liar loans across the Tasman. You know, the ones where all those lovely mortgage brokers overstated clients income. What happens to their banking system, matters to ours.

Keep digging, your getting closer to China.

RP, seriously why are you so bitter and twisted in regards to people who,own houses?
Are you looking to buy one of Mr Twyford’s 40m2 ghetto unit in the Unitec subdivision?
They will be very affordable at 600k and will be such a desireable development!
Gee we are so lucky to,have such a progressive new Govt. In power aren’t we, as they are going to solve every problem that the previous National Govt. created!