Hot on the heals of yesterday's sharp fall in wholesale swap rates, ASB has launched a new super-low four year fixed rate.
Their new rate is 4.95%, a -44 bps drop from 5.39%.
This is now the lowest four year rate in the market, even lower than HSBC Premier's recently lowered 4.99% rate.
This is also the lowest four year rate since July 2016 when, again, it was ASB who offered 4.59% back then until October 2016.
Today's wholesale swap rate for a four year duration opened at 2.28%. Back in July to October 2016 it averaged just 2.08%.
Yesterday's sharp fall in swap rates may be enough for lenders to contemplate reduced mortgage rate offers, especially as we are now just a few weeks away from the start of the Spring real estate selling season.
But the two triggers for yesterday's wholesale rate drop (the RBNZ dovish MPS, and the Fonterra trading halt) may be 'one-offs' that get reversed as new data comes to light, or the markets may judge there has been an over-reaction. Most lenders will wait a while to assess whether this is a permanent shift lower.
The news will not be good for term deposit savers; it could equally presage a drop in offer rates for them.
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 July 9, 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%.