Yes, ASB has joined the under 4% mortgage rate party. But it feels like they are following reluctantly.
ASB, which is the second largest mortgage bank in New Zealand, has adopted the 3.95% one year fixed price point.
But the bank has taken the opportunity to raise rates for two other fixed terms, one of which ASB was market-leading on.
Its 'special' rates only require customers to have a minimum of 20% equity; that is, an LVR of 80% or less.
ASB is raising its 18 month 'special from 4.15% to 4.29%. That will leave Westpac on 4.15% and HSBC Premier is still offering 3.85% for 18 months fixed.
And ASB is raising the hot three year rate of 4.39%, which was market-leading, up by +10 basis points to 4.49%. That is a level adopted by just about every bank.
ASB's changes are all effective on Wednesday, November 14.
So far today (Tuesday), wholesale swap rates are moving very little, with just a hint of weakness for durations of three years and above.
After today's shift by ASB, only three banks are not offering a sub 4% fixed mortgage rate; Kiwibank, Co-operative Bank and TSB.
As at June 2018, ASB had 64.9% of its loan book in mortgages. That is the largest proportion of any of the big Aussie banks operating in New Zealand, and of the majors is only higher at Kiwibank which has 88.9% in housing loans. The bank with the most balanced loan book is BNZ with 47.3% in housing loans and therefore the only bank that can't be called a mortgage bank.
Update: The Co-operative Bank has trimmed its one year rate from 4.19% to 4.15%.
Kiwibank earlier had a sub 4% rate, but that has since expired.
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 14, 2018 | % | % | % | % | % | % | % |
| ANZ | 4.99 | 3.95 | 4.85 | 4.29 | 4.49 | 5.55 | 5.69 |
 |
4.95 | 3.95
|
4.29
|
4.29 | 4.49
|
4.95 | 5.09 |
 |
4.99 | 4.15 | 4.79 | 3.99 | 4.49 | 5.19 | 5.39 |
 |
4.99 | 4.05 | 4.29 | 4.49 | 4.99 | 5.09 | |
 |
4.99 | 3.95 | 4.15 | 4.29 | 4.49 | 5.29 | 4.99 |
 |
4.50 | 4.10
|
4.29 | 4.35 | 4.49 | 4.99 | 5.15 |
 |
4.85 | 3.85 | 3.85 | 4.19 | 4.69 | 4.99 | 5.29 |
 |
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%.
27 Comments
Correction or biggest housing crash in 40 years?
Lowest rate is yet to come. Lots people will re-fix after New Years/summer time, one year fix is the new floating. Banks will dish out even better rates. Good for some, sad for others.
New age recession = low prices, cheap rates and low wages. Thank the internet for fast information.
I just fixed for 1 year with BNZ for 4.09% on one of the parts of my mortgage - actually it doesn't roll over until December but I've now got a 'rate-lock' which has a $500 fee to break.
However I have another part of my mortgage, which is not much smaller, currently at 4.55% that isn't due to come up for renewal in 10 months time in September next year. Break fee on this is only $190 and monthly payments will reduce by about $50, so after 4 months I'll be in the black, with 20 months left on the fixed term. Almost certainly going to go ahead with this, and also enquiring about breaking my other mortgage section which is fixed for 3 years at 4.79% until December 2020.
Clearly the $500 "rate-lock" fee that BNZ are asking for is not the same formula as used for their actual mortgage break fees, because the difference between 4.09% and 3.99% for 12 months vs 24 months should not be $500, if it's only $190 for a mortgage with 10 months left currently on 4.55%.
I'm going to do some digging around what the RBNZ says about break fees and how 'reasonable' they have to be, and whether this 'rate-lock' fee would fall under that definition or not.
Wow, that sounds terrible.The fact it's a straight $500 regardless of what was fixed makes it seem like it's not actually a collection of costs
As a side - unless you need the money, dont reduce your payments... that means more interest in the long run. The quicker you pay, the cheaper it will be
It's because there is no 'growth' in the economy.
Thats why Allan Bollard introduced us to the 'emergency rate". If you cannot pay %3.9 we will drop it to %2.9, further into the abyss of desperation and despair.
" Examining the relationship between 3-month and 10-year benchmark rates and nominal GDP growth over half a century in four of the five largest economies we find that interest rates follow GDP growth and are consistently positively correlated with growth. If policy-makers really aimed at setting rates consistent with a recovery, they would need to raise them. We conclude that conventional monetary policy as operated by central banks for the past half-century is fundamentally flawed. Policy-makers had better focus on the quantity variables that cause growth."
https://www.sciencedirect.com/science/article/pii/S0921800916307510
https://www.alhambrapartners.com/2018/11/12/the-long-shadows/
TOKYO (Reuters) - Japan’s central bank has become the first among G7 nations to own assets collectively worth more than the country’s entire economy, following a half-decade spending spree designed to accelerate weak price growth.
https://www.reuters.com/article/us-japan-economy-boj/bank-of-japans-bal…
Every single stock on the Nikkei 225 is down.
https://www.nasdaq.com/article/japanese-market-falls-nikkei-down-3-2018…
Is this actually a good or bad thing for the economy? IMO I think it will mean that borrowers can afford to service a larger mortgage, so can afford to borrow more, and potentially push house prices up even further. Maybe a good thing for those already with a mortgage who want to pay it off earlier.
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