Kiwibank has sliced its fixed home loan rates to be flat across all terms from one to five years, the first bank to offer all these rates below 4%

Kiwibank has sliced its fixed home loan rates to be flat across all terms from one to five years, the first bank to offer all these rates below 4%

It has happened.

Rates out to five years fixed are now available below 4%.

Kiwibank has released three more market-leading fixed mortgage rates.

It's already setting the pace with a 3.55% one-year fixed rate, a rate that its rivals are being challenged to match.

Now it has trimmed -6 basis points off its two year rate, taking it down to 3.59% and matching ANZ's rate for that term. 3.59% is the market-leading two year rate.

But the big news is that for four years and five years fixed, Kiwibank is now offering 3.99% for each term. These two rates are unique and market-leading. And they may be the first time ever rates have been this low for four and five years fixed.

These new rates are not available until Monday, September 2, and are only available for borrowers with at least 20% equity.

At these new levels, they are -30 bps to -96 bps below all other bank rivals.

Almost all banks are offering flat term deposit rates for terms two years to five years, and almost none of the majors are offering 3% any more to savers.

The other factor to watch is wholesale swap rates. They turned back down sharply today (Thursday) and are now at lowest-ever levels. Local business confidence levels aren't helping financial market sentiment

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 30, 2019 % % % % % % %
ANZ 4.29 3.65 3.99 3.59 3.99 4.85 4.95
ASB 4.29 3.75 3.75 3.69 3.89 4.19 4.29
4.79 3.69 4.55 3.75 3.99 4.35 4.45
Kiwibank 4.79 3.55   3.59 3.99 3.99 3.99
Westpac 4.99 3.69 4.79 3.75 3.99 4.35 4.45
Co-operative Bank 3.69 3.69 3.75 3.75 3.99 4.19 4.29
China Construction Bank 4.70 4.85   3.65 3.90 4.95 4.95
ICBC 5.15 3.79 3.79 3.75 3.99 4.29 4.39
HSBC 4.65 3.65 3.69 3.69 3.85 4.19 4.29
HSBC 4.29 3.69 3.69 3.69 3.99 4.49 4.49
  4.55 3.85 3.89 3.79 4.05 4.45 4.55

In addition to the above table, BNZ has a unique fixed seven year rate of 5.70%.

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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I have mortgage due to roll Sept 5th, TSB have offered me 3.59% for 12 and 24months. Wont even match Kiwi 12 month special of 3.55%. Is it possible to get under 3.5 yet?

What equity do you have? Tell them to match or you walk. ANZ offered me 3.55% for 1 year this week as their 'best rate' without me even having to push for it.

Westpac will match too, though I did see my personal banker visibly gulp when I pointed out that Kiwi bank had dropped to 3.55%. And yes the banks will be dropping even lower in the next few months and possibly years down the track. Welcome to the new normal.

..about 65% equity. Cant walk and they know it ! Income just below necessary levels now days to refinance elsewhere.

ANZ offered 3.55% without prompting. 3.64% the week before, thankfully they were slow in processing the application so I got the lower rate.

We'll be below 3% next year.

To my knowledge 3.55% is lowest. Definitely not worth moving banks for 0.04% difference but I'm surprised TSB is not willing to match Kiwibank

I feel lucky that I managed to get a three year mortgage for 3.95%. Will be paying less tax on my profits.

In the grand scheme of "Why do interest rate yield curves invert?" more than likely the last 2 years of your mortgage run could look very expensive!

Go onnn chuck ya 1-5 year rate predictions down here for in 1 years time so you can check back see how close ya got haha.

I posted last week that (1) Kiwibank could be the first to drop 4/5 years to 3.99%, and (2) it's likely 2 years fixed could bottom out below 2%. Will that be within the coming year to make that last 2 years of that fixed run look expensive? Could be!

Do you mean the last two years of a mortgage where you end up paying very little interest at all because the P+I payment is mostly P?

Pretty sure he means a three year fix on a X year mortgage, not a 3 year mortgage.

That will look expensive in 6 months. Less tax = Less profits.

A bit confused Zachery SMith i am, but will you not actually be paying more tax on any profit? Interest is a deductible expense for business, if interest amount is lower than previous, your taxable income will be higher (not as much interest to deduct), hence more tax. But your net profit after tax will be higher all else being equal.

Zach is being sarcastic, he realises he shouldn't have fixed for 3 years ( I told him to fix for 1 year), so he's making less profit than if he'd fixed for 1 year at a lower rate, therefore he's jokingly saying he's paying less tax

Yvil wins! Just trying to find the silver lining on this cloud. At first it didn't seem so bad as it was only about $20 a month I was losing by fixing at 3.95% but now it has grown to $100 a month for three years which is a lot for a landlord. I'm wondering if I should threaten to move banks if they don't give me a good deal for breaking and re-fixing.

Can you expand on that Zach? Mortgage rate drop will mean higher profit...more tax surely?

Zach's a pretender. If he was truly an investor he would have known that.

I think mortgage rates will continue to come down. The problem will be that less people will be able to access them if the economic climate continues to sour.
As an investor, if you have high DTI and LVR, I think it's likely your opportunity to access these lower rates will decrease, so perhaps better to lock in a longer rate now. If you have decent LVR and DTI and if you are a home owner, there will probably be a even better deal ahead.

I'm glad the banks are acting fairly quickly in reducing their mortgage rates, lets hope it's enough to help all those who are now coming off their Interest Only mortgages rates and are now having to go on to repayment of principle mortgages. That's going to be a huge shock for most of them, coupled with negative equity it could be disastrous for some.

That's the essence of capitalism though isn't? The downturn wipes out the weakness. As and investor, if you were dumb enough to have high debt and remain negatively geared in 2019 then you have no one to blame but yourself. Every investor has had plenty of warning of the downturn coming and to position themselves accordingly.

I am negativley geared as supporting a boomer who relies solely on the super to get by. Discounted rent, new car, pay for power and travel, but hey they had it tougher than us remember. At least we have paid of student loans and decided kids was too expensive.


I'm not sure I follow you Frazz? You have a negatively geared investment? Why didn't you sell it so that you were less exposed?

And boot out the mother N law and icure the wrath of my signicificant other ..not worth the grief.

Oh? That's totally different then, you're effectively providing charity, rather than trying to make a profit.

I'm not referring to those kind of things. But rather investors who could have sold an asset to reduce risk/debt on a risky exposed portfolios. Not someone with persona/family issues. Family issues aren't based on pure profit/investment strategy and have nothing to do with capitalism per se.

Sorry - should have left my moaning off this site - agree with you

I'm in the exact same position Zach with my mother-in-law but I wouldn't consider it "negatively geared" although technically you're correct, it's just family, she's a great lady and she doesn't have enough to get by so you help family. Good on you, be proud of it.

It's an interesting facet of the whole housing market, inter-generational households. Very much the norm for people from countries where a large number of our migrants are coming from, and may well become more common among locally born NZers as a result of the housing affordability crisis.

Oh RS, my mother-in-law doesn't live with my wife Kid & I, M-I-L has 5 kids, we all agreed years ago to share the cost of her rental, very quickly it became apparent no other kids were paying rent except my wife and I, so I decided I would buy her a separate house to live in, under my Trust's name of course.

Probably a more peaceful option, in fairness :-)

"Rates out to five years fixed are now available below 4%"

You called it a few weeks ago DC, well done

Possible FHB here - seeing conflicting signals on prices going forward.. If you were in my shoes, when would you look to buy?

When you have enough of a deposit that a bit of a fall in house prices wouldn't leave you in negative equity, don't overextend just to get into the market... and when you find something that meets your needs and you can afford, without living a paupers lifestyle to make the payments. ( which is unlikely if the banks are still testing affordability at 7%+)

Very well said pragmatist

In 2016 prices were rising so fast, at least now it doesnt look like there will be a huge increase any time soon. I think no harm in waiting to see what happens in the next few months, just dont rush in is what im saying. Take your time work through your numbers. Interest rates look to fall further too. my 2c

KIWIBANK have just figured out that low interest rates are going to be with us for a VERY long time , like happened in Japan

Hopefully Kiwibank are prudent enough to ensure the majority of new lending has at least 20% equity behind it, as the tide may still have some way to go. My money in deposit with them is counting on some commercial acumen here.

All is not well in the State of Denmark ............Jyske, Denmark's third largest bank, is offering a mortgage rate of -0.5 per cent for 10 years, which means borrowers' debts are reduced by more than the amount they pay back