ANZ has decided it can't live with its current mortgage rate settings following ASB's recent cuts.
Now New Zealand's largest home loan lender has responded with its own cuts, and made them across the board.
ANZ have matched ASB with a 4.29% one year 'special' rate.
And they have matched ASB with their new 4.49% two year 'special' fixed rate. Both of these changes involve a -6 bps reduction.
They have taken -14 bps off their three year 'special' rate, taking it down to 4.85%, which is not quite as low as the ASB offer.
For rates longer, the changes are to their standard fixed rates.
ANZ's four year rate drops -4 bps to 5.85%.
And their five year fixed rate drops -10 bps to 5.99%.
The result is a carded rate offering that is still on the high side for longer terms but is not as uncompetitive for these terms as it was.
ANZ's key fighting rate is clearly their one year 4.29%. That matches ASB, the Cooperative Bank, SBS Bank, ans TSB.
Only HSBC has a lower one year fixed rate at 4.19%. And of course nothing matches HSBC Premier's 3.85% eighteen month fixed rate 'special'.
ANZ's 'specials' do come with requirements others don't always impose. In addition to needing to have an ANZ transactional account with salary direct credited, you also need to commit to one other ANZ product if you are a new customer.
In wholesale markets, swap rates have been little changed in more than a year, so wholesale money costs are not behind the move at the short end. Competition is.
At the longer end, perhaps falling swap rates are allowing those reductions.
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 June 20, 2018||%||%||%||%||%||%||%|
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%.