SBS Bank makes a small trim to its key mortgage rate offers, taking two of them down to market-leading levels. However, the whole home loan market is awaiting an RBNZ rate cut and assessing the impact of sharp swap rate drops

The latest mortgage rate change is from SBS Bank and they have claimed market leading rates for one year and eighteen months fixed by taking -1 bps off the low rates of others.

Their new 'special' rates for one year, 18 months and two years fixed is now 3.78%. For them, that is a -7 bps cut to each.

They haven't changed any other rate but this is enough to stand out in some key home loan rates.

Earlier, China Construction Bank adjusted most of its standard rates lower, but it didn't change its 'specials'. Their 2 year fixed, 3.65% rate is currently the lowest rate for any fixed term in the market.

But you do have to wonder how long it will hold that position.

Wholesale rates have dived following the US decision to extend its tariffs on Chinese-made goods. And these background rate shifts have been substantial. They have resulted in swap rates being pushed -15 bps to -25 bps lower since the start of July, with most of that drop happening in the past week. It is hard to see these shifts reversing given that they are underpinned by weak international economic conditions that forced the US Fed to cut rates.

And in Wednesday, August 7, markets are expecting the RBNZ to cut official rates as well and that will probably follow an RBA cut on Tuesday evening.

Of course, how far lower mortgage rate offers will go following these cuts is speculation. Banks have recently chosen to hold some back so that term deposit savers aren't hit with the full reductions. Still, a majority of any official rate cut will find its way into lower fixed mortgage rates. When is open to question; banks may hold back until the Spring real estate season kicks off so they can embellish the benefits of their 'specials' at that time. But holding back exposes them to public criticism in the meantime. The last time the RBNZ cut rates, most large banks were out of the blocks quickly with some pass-throughs.

However, as rates sink lower, banks will be under increasing margin pressure. But that pressure won't be anything like the pressure on savers who are trying to live on interest rate earnings.

The new SBS Bank rates became effective on August 3, 2019

See all banks' carded, or advertised, home loan interest rates here.

Here is the full snapshot of the advertised 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 August 3, 2019	%	%	%	%	%	%	%
ANZ	4.49	3.85	4.19	3.79	4.05	4.85	4.95
	4.49	3.85	3.89	3.79	4.05	4.35	4.45
	4.99	3.85	4.79	3.79	4.05	4.35	4.45
	4.79	3.79		3.79	3.99	4.29	4.39
	4.99	3.85	4.79	3.79	4.05	4.35	4.45
Co-operative Bank	3.79	3.79	3.79	3.84	3.99	4.29	4.39
China Construction Bank	4.70	4.85		3.65	3.90	4.95	4.95
ICBC	4.85	3.85	3.99	3.95	3.89	4.29	4.39
	4.85	3.79	3.79	3.79	3.89	4.19	4.29
	4.99	3.78	3.78	3.78	3.99	4.49	4.49
Incl price match promise	4.85	3.85	3.99	3.79	4.05	4.35	4.45

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

Kiwibank didn't change any term deposit rates at the same time as this mortgage rate announcement.

All carded, or advertised, term deposit rates for all financial institutions for terms of less than one year are here, and for terms of one-to-five years are here. And term PIE rates are here.