ANZ cuts some key fixed home loan rates, and TD rates

Personal Finance

New Zealand's largest home loan lender has reduced its one year fixed mortgage rate to just 3.69%, trimmed other fixed rates, and reduced all its term deposit rates

9th Aug 19, 5:43pm by David Chaston

ANZ has changed home loan rates lower with some aggressive cuts.

They have cut their one year 'special' to just 3.69%, a market-leading rate for this term. That involves a cut of -16 bps.

They have also cut their six month fixed rate to 4.29, a reduction of -20 bps. The Cooperative Bank has a lower rate, but this is the lowest among their main rivals.

For eighteen months fixed, the cut in their 'special' rate is also -20 bps to 3.99%. ASB has a lower rate.

For two years fixed it is just a minor trim of -4 bps to 3.75%, matching ASB and BNZ. China Construction Bank has a lower rate.

For three years fixed, the have trimmed -6 bps for a new 'special' rate of 3.99%, matching Kiwibank.

'Special' rates are only available to customers with 20% equity or more and who have a transaction account into which wages or salaries are direct credited.

They made similar reductions to their standard rates.

These moves will no doubt draw a response from other institutions.

At the same time, ANZ has cut its term deposit rates across the board by between -10 bps and -25 bps. The key six month and one year TD rates are both down -15 bps. Out to three years all their term deposit offers are below 3% now (except for their eight month 'special').

more soon ...

Here is the full snapshot of the advertised fixed-term rates on offer from the key retail banks.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at August 10, 2019	%	%	%	%	%	%	%

ANZ	4.29	3.69	3.99	3.75	3.99	4.85	4.95
	4.49	3.85	3.89	3.75	4.05	4.35	4.45
	4.99	3.85	4.79	3.75	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	4.29	3.69	3.89	3.75	3.99	4.35	4.45

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

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.

Fixed mortgage rates

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Source: interest.co.nz

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41 Comments

by Basil brush | 9th Aug 19, 5:54pm 1565330046

And the music keeps on playing. Stoke the fire with petrol.

by Son of a Point | 9th Aug 19, 5:59pm 1565330382

I'm not so sure Basil, when my Dad gives me an advance on my pocket money, its interest free, but I still have to pay it back.

I'd hate to owe someone 500k for a house in Auckland that is likely reducing in value. Even if it was interest free.

by JimboJones | 9th Aug 19, 7:45pm 1565336715

Although the repayments are probably not much more than rent. So if that’s too much then everyone’s screwed.

by Carlos67 | 9th Aug 19, 6:29pm 1565332188

Got to keep the party going, its all over the news everyone is trying to talk up the economy and "Inspire" everyone to take on more debt.

by Yvil | 9th Aug 19, 6:22pm 1565331721

Here we go... I called 3.49% by end of Sept for 2 years straight after the OCR cut, any other picks?

by Carlos67 | 9th Aug 19, 6:32pm 1565332357

Its going to take another cut or two to get to that Yvil. Floating rates may be moving but there appears to be no rush to change fixed rates. TD's changed overnight.What happens when the OCR is at 0% and the rates are still at 3.49% ?

by Yvil | 9th Aug 19, 6:40pm 1565332831

Why would bank rates be st 3.49% if OCR goes to 0% (and swaps will be still much lower)?

by Pragmatist | 12th Aug 19, 8:14pm 1565597654

Have you had your head buried in the sand?

Tier1 capital, core funding requirements, reliance on local deposits.. ring any bells? These have all been explained many times on here.

https://www.interest.co.nz/banking/97389/rbnz-proposes-significant-incr…

by Lanthanide | 9th Aug 19, 7:34pm 1565336065

They'll certainly get to 3.59% for 1 year in spring, and I think 3.49% for 2 years is quite likely, but might be a "limited time" offer.

by b21 | 9th Aug 19, 6:22pm 1565331751

So cutting the OCR by 50 bps basically translates into higher profit margins for banks as they won't pass it to their customers. One more reason to not to borrow.

by Yvil | 9th Aug 19, 6:45pm 1565333101

I don't share this way of thinking. I'm happy for banks to make $1 if I make $1. If you & I are in business together (which I am with my bank) I'm happy for both of us to make some money

by Andrewj | 9th Aug 19, 7:18pm 1565335081

You are not in business with your bank.

by Yvil | 10th Aug 19, 11:38am 1565393930

I very much disagree, I am definitely in business with my bank, my solicitor, my valuer, my RE agent, my tradespeople etc…They provide a service, I pay them, that's called doing business and as such the relationship works as long as it's mutually beneficial.
A friend who is also a property investor goes further and he likens the team working with/for him to a sports team. He's the coach, the professions I mentioned above are the players, if one of them doesn't perform well he replaces them

by Nzdan | 10th Aug 19, 12:38pm 1565397510

So lets say hypothetically your "business" hits a brick wall and you're in trouble. Will your bank, solicitor, RE agent and tradespeople help you out?

E.g. "Sure Yvil, I see you're in trouble but we're in business 'together' so let us know who your creditors are and how much you owe and we'll split the costs evenly among us".

Your friend sounds a little bit delusional, just tell him to wait until the bank asks for their umbrella back.

by Yvil | 10th Aug 19, 4:56pm 1565412964

No I wouldn't expect them to help me out (although if you have a long-term, good relationship some leniency could be given, i.e. ANZ generously offered 3.5% interest rates for up to $500k mortgage for people who lost their house in the Chch EQ, back then rates were typically 5.49%).

But the main point is why would I expect others to help me out if my business struggles? It's my business, I reap the benefits if I do well, I pay the price if I do badly. That's the same in any business relationship whether this business relationship is with your bank, your supplier, your customer etc...

by Hardly | 9th Aug 19, 9:20pm 1565342451

Banks aren’t in business with you. You are their customer, they care if you can pay for the product, they don’t care if you prosper.

by Yvil | 10th Aug 19, 11:40am 1565394021

See my comment above Hardly

by Yvil | 10th Aug 19, 5:04pm 1565413487

Banks do care if you prosper because otherwise they lose you as a customer and they are out of money, that's why they provide many free business seminars to their business clients.

You seem to imply that banks are mean because "they don't care if you prosper". Banks are a business, just like a retail shop or service provider, as such their first duty is to be profitable, that applies to every business and it doesn't make them "mean businesses". If you want care and love, talk to your partner, your friends or your family.

by b21 | 10th Aug 19, 8:02am 1565380925

The fallacy in this answer is that it does not reply to the original statement. Banks are not here to make business with you, they take advantage of a privileged position to make a profit out of it. It's been historically called "usury" but this term has (conveniently) changed its meaning to just apply to those loans that are considered corrupt or unethical. It also used to be considered a sin by many religions.

by Yvil | 10th Aug 19, 5:10pm 1565413809

Nobody is forced to enter into business with a bank, if we deposit money or borrow some, we do it by free will. We are just like the banks in the sense that we want the best deal for ourselves. Will you say "I don't need 3.1% interest on my deposits, just pay me 2.2%, that'll do for me? Do I say I'll pay the bank more interest or bank fees than necessary? No we don't! That puts us in the same position as the banks and it doesn't make us bad people

by b21 | 10th Aug 19, 10:13pm 1565432000

Of course we are forced, at some point in your life we all may need something we cannot afford with our savings and most of these things have become unaffordable just because of credit growth and availability. How much would a home cost if credit would not be available at all or highly restricted to very specific scenarios?

by MisterB | 9th Aug 19, 8:53pm 1565340813

Variable loans are priced off of OCR - and they all dropped - fixed loans are priced off wholesale rates, which did not drop 50bps

by Yvil | 10th Aug 19, 11:43am 1565394193

Actually wholesale rates (swaps) have dropped a whole lot over the last month or so, but fixed lending rates are off the back of deposits, which have not dropped much

by MisterB | 10th Aug 19, 1:18pm 1565399936

swaps havent dropped 50bps

by Yvil | 10th Aug 19, 5:12pm 1565413947

Since you want to split hairs, Interest had an article stating that (I think it was 2 year) swaps had fallen 0.45% since the beginning of June

by Grant A | 10th Aug 19, 7:44pm 1565423079

B21 - understand that banks do not get their funding via the OCR, only from depositors and offshore funding. And understand, there is a limit to how far banks can take down deposit rates before they start losing such deposits (and they are now). Pays to be informed before you start casting aspersions

by b21 | 11th Aug 19, 12:00pm 1565481614

Of course they do not and have not claimed this in my statement, and because you're accusing people of being uninformed I'll ask you to please take some time to learn how most mortgages in Europe work and you'll find they use the Euribor as index meaning that if the CEB raises or lowers this rates will automatically change once they get reviewed which may happen at different periods, this does not affect banks from losing any deposits though.

by Andrewj | 9th Aug 19, 6:40pm 1565332839

China has first factory gate deflation in 3 years
https://www.wsj.com/articles/chinas-factory-gate-prices-slip-into-defla…

It's going to be so much fun watching the banks and RB try and stick this economy back together with strings and ceiling wax and other fancy things.

by THE MAN 2 | 9th Aug 19, 7:06pm 1565334365

These low rates are here for a very long time by the look of it.
There will certainly be problems if rates do rise a few per cent, but don’t think they will as the world can’t afford to have this.
Must be difficult for People who rely on interest as it is not worth the effort with returns of under 2% tax paid.
People who are invested in property and are getting good yields are doing a good job for the country in providing accommodation for people who want or need to rent.
Pointless trying to talk the market down as some property is overvalued, however most well bought property continues to provide even better returns, with the interest rates at such lows!

by Foxglove. | 9th Aug 19, 7:12pm 1565334749

TM2 interested in your take re CHCH fixed overheads for landlords? How do you see sharp increases in rates and insurance affecting rents & then another hike on rates likely next year when council jacks up the valuations accordingly?

by THE MAN 2 | 10th Aug 19, 12:41pm 1565397675

Personally doesn’t affect us as our rental yields are very good.
Rateable values going up doesn’t mean that rates will go up, however we all know that they will rise just because!

by THE MAN 2 | 10th Aug 19, 12:42pm 1565397758

Personally doesn’t affect us as our rental yields are very good.
Rateable values going up doesn’t mean that rates will go up, however we all know that they will rise just because.
Rates and insurance are just part of investing and if your returns are not sufficient to make it worthwhile then I would be considering selling, if the price is right

by Foxglove. | 10th Aug 19, 2:03pm 1565402587

Just a whisper, hardly a murmur in fact from an undisclosable source. How would you feel about a city council classifying residential rentals as premises conducting commerce, and introducing, inflicting would be a better word, “commercial” rates as per any one business as considered appropriate by those in authority. There are some desperate money raising schemes about one might reasonably suspect, being plotted in rooms without windows to which few have a key.

by Nzdan | 12th Aug 19, 7:12am 1565550723

Whatever you are suggesting, it's irrelevant because the rent will just go up and the tenants lose at the end of the day...

by Andrewj | 9th Aug 19, 7:17pm 1565335034

you cannot build a resilient economy by inflating assets.

by Voiceofreason | 9th Aug 19, 8:30pm 1565339430

So term deposits are now under 3%. The RBNZ wants people to invest in the inflated share and property markets, and businesses. A problem for them as the OCR drops further, and the NZ$ retreats, perhaps interest rates to zero or below (!), is that that other traditional store of wealth, gold, will mostly likely spike and provide superior capital gains (already is), although no yield.

by Fritz | 9th Aug 19, 7:30pm 1565335839

Whoopdy doo

by waymad | 9th Aug 19, 8:04pm 1565337886

As the possessor of three Hults Bruk axes, two sharp enough to shave with, I note with Interest that the picture shows a rather weatherbeaten axe, munching (couldn't call That slicing) into what for all the world looks like a completely rotten log.

Metaphors aplenty........

by Foxglove. | 10th Aug 19, 10:41am 1565390465

Could our intrepid and illustrative Interest cartoonist sketch up a depiction of a broke motorist filling up the beaten up family car under the caption that cheaper petrol will make it go really good and make them all feel better.

by mikekirk29 | 10th Aug 19, 9:47am 1565387252

Why cut price of credit? Because not enough buying it. Fear of buyers now trumps drive for acquisition. People who were adult in 2008 will be advising offspring to hold back

by JediNight | 10th Aug 19, 1:58pm 1565402319

People will only borrow as much as they are comfortable with. The RBNZ is in the business of trying to anesthetize people against their instinct which is telling them we're being led down a path by deranged statisticians who only want to suck us of our lifeblood.