Another major bank reduces one mortgage rate below 4%, leaving only ASB and Kiwibank as majors with no offers at this new level

Photo: Scott Lewis/Flickr

A third major bank has joined in with a mortgage 'special' below 4%. Now Westpac has matched ANZ with a 3.95% rate for one year fixed.

Westpac requires a minimum of 20% equity and a transactional account with salary. This rate is available for owner-occupied residential properties only.

This follows ANZ and BNZ.

And they followed SBS Bank with its own sub 4% rate.

And they all followed HSBC Premier which still has the lowest rate in the market at 3.85%.

Kiwibank earlier had a sub 4% rate, but that has since expired.

ASB is the only major yet to join in.

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 November 12, 2018 % % % % % % %
               
ANZ 4.99 3.95 4.85 4.29 4.49 5.55 5.69
ASB 4.95 4.19 4.15 4.29 4.39 4.95 5.09
4.99 4.15 4.79 3.99 4.49 5.19 5.39
Kiwibank 4.99 4.05   4.29 4.49 4.99 5.09
Westpac 4.99 3.95 4.15 4.29 4.49 5.29 4.99
               
4.50 4.19 4.29 4.35 4.49 4.99 5.15
HSBC 4.85 3.85 3.85 4.19 4.69 4.99 5.29
HSBC 4.99 4.19 4.49 3.95 4.49 4.89 4.89
4.85 4.05 4.19 4.19 4.49 4.95 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.95%.

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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20 Comments

Perfect timing for those dropping off their fixed term.
3.95% - great stuff.

Agreed. Although, I can see many taking advantage of lower interest rates/repayments to add to, rather than reduce the mortgage. Now's not the time for such complacency.

Agreed - keep your repayment amounts the same and pay off the principal faster.

Absolutely MB

To be honest it is possibly worth breaking for those who still have a year to run on a 2 year mortgage. https://www.interest.co.nz/calculators/mortgage-break-fee-estimator

What a pickle!

What a pickle!

Someone's going to come out with a knock-out rate sometime really soon!
2 years fixed at 3.45% or the like, and that will confirm the disaster that is about to overwhelm us. I asked yesterday, "Can't you feel it?", and I'll ask that again. This time it's not about where % rates are headed, but "Can't you fell the disaster that is upon us?". I can. It's an almost physical feeling now; in the stomach and the back of the knees. It's arrived.
(NB: Why a knock-out rate? Because whoever does will be writing next to no new business down there; the rate doesn't matter that much. Their lending criteria will be too restrictive. But it will keep their existing customer in-situ ( the ones they want) - and solvent!)

Agree with you. The rates will come down to 3.5%. hopefully like in Australia this kinds of rates (3.5%) are restricted to owner occupiers and investors have to pay a higher rate. Also good points by earlier that people need to keep their borrowings the same and not increase the loan amount as their affordability has gone up.

I've been in touch with SBS and they tell me their 3.95% "p.a" rate is calculated daily which is pretty misleading as that is actually over 4%. Are all the banks like this? How is anyone supposed to compare interest rates if the banks are misleading people on the true interest rates?

All banks interest rates are advertised with the comments- subject to change- this is because the market changes all the time, which means the rate at which they effectively borrow at changes with that market. If there was a big changing event in the market that meant rates suddenly jumped up 0.50%, then you can bet that the 3.95% will not be the current rate from then on.

Irrelevant when calculated, i.e. daily or weekly, capitalisation (when debited) of the calculated daily or weekly amount will determine the interest rate as the capitalisation determines the compounding effect in the same manner as Term Deposits when comparing monthly compounding with interest at maturity.

All i was trying to get through is that rates are subject to change. I wouldn't run my business if my cost of sales could rise suddenly without the option of passing this on to my end price.

I think you've got the wrong end of the stick from bilbo's comment. SBS's 3.95% rate is fixed for 2 years. It's not like 2 weeks into the contract the rate is suddenly going to go up.

Not sure I follow. PA means per annum. The interest rate is 3.95% per annum. Not sure how that is misleading in any way. How else would you measure 'true interest rates'?

Kiwibank are matching 3.99% for 2 years plus cash and they cover the legal cost of switching.

Any cash backs with kiwibank? If so what strings are attached?

I got 3k. Have to stay with them for 3 years. They provide the solicitor for free but any break fees etc with the previous bank come out of the cash they give you.
Breaking from ANZ 1 year early on 2 year fixed term seems to cost about $600 +100 to terminate the loan.

Surely they can just gobble up that cashback when it's time to negotiate after 2 years. BNZ's cash backs are 4 years but the claw back is calculated pro-rata every year. Personally I think the cashbacks are a load of b*s* unless you get to keep it at the end of your term.

With ANZ I got a reasonable rate at the end of the first fixed term (Well below the carded rate). So I definately came out ahead with the cash back. I anticipate rates to remain low for the next few years so I am not concerned to much about getting stung with a higher rate. Even if I took the carded rate when I need to refix I would come out ahead. 3k now is better than slightly higher interest payments for 1 year starting 2 years in the future when taking into account compounding interest.