After the dramatic rate drop by HSBC Premier (which is still available), the next move in the home loan rate market is, perhaps surprisingly, up.
BNZ has retreated from its sub-4% two year fixed rate, raising that rate by +30 bps to 4.29% and matching nearly everyone else.
At the same, they have trimmed -10 bps from their noncompetitive one year rate, although even after the change, the resulting 4.10% level is still not rate competitive with any of their main rivals.
Update: Westpac has also now raised a series of rates, and dropped some 'specials' in a broad move higher for its rate offers.
These changes come even though wholesale swap rates for one year have been stable for 5 months, and two year swap rate has fallen -10 bps in the past month (although today's level is +10 bps above the general level over the past four months).
Retail term deposit rates, the main source of bank funding, aren't moving either. (Although BNZ did take the opportunity today to reduce its RapidSaver bonus saver product by -10 bps.)
BNZ's changes are probably a signal that the imperative to be in the market with low rates is lower as the Spring house selling season draws to a close. And the great bulk of the loan rollover end-of-year surge has now passed, so the pressure from that source has lessened too.
The main feature of the competitive rate profile is how bunched the main banks are around the same rate especially for some key terms. A few challenger banks are trying to find pricing points that give them a profile difference, but the main banks are clearly trying to avoid advertised carded rate competition, preferring to respond to customers only when pressed on individual deals.
The latest margin data shows this remains stable, with BNZ and Westpac having the lowest net interest margin of 2.1%, ANZ and Kiwibank stable at 2.2% and ASB the highest at 2.3%. The net interest margin measures the difference between the interest earned from customers, less the interest rate banks paid to depositors and lenders, as a percentage of average interest-earning assets.
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 30, 2018||%||%||%||%||%||%||%|
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%.