New Zealand's second largest home loan lender has trimmed two key fixed mortgage rates, matching key rivals but not pushing the boat out any further than they have to. Westpac follows too

New Zealand's second largest home loan lender has trimmed two key fixed mortgage rates, matching key rivals but not pushing the boat out any further than they have to. Westpac follows too

ASB is the next bank to move mortgage rates lower, although they are not breaking any new ground.

They too have adopted 3.65% as their one year fixed rate, matching ANZ and HSBC. But Kiwibank's 3.55% one year fixed rate is still the market leader for that term.

In some ways it is interesting that ASB hasn't chosen to match Kiwibank at this time, but if you have strong financials, we are hearing that most other banks will discount to that level if you push them.

ASB has also adopted 3.59% as their two year fixed rate. Again, this is just matching ANZ and it also matches Kiwibank for this term. 3.59% for two years is market-leading.

ASB's new lower rates are effective immediately. They also apply to Sovereign's home loan offers.

Also of interest is that ASB hasn't tried to match Kiwibank's sub-4% rate offers for four and five years fixed. Both the term deposit rate cards, and the wholesale swap rate curves suggest that premiums for longer duration fixed rate loans are no longer justified.

Update: Westpac has now matched ANZ and ASB one year and two year 'special' rates.

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 3.65 3.75 3.59 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 3.65 4.79 3.59 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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16 Comments

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That big OCR cut actually gave the banks something to fight over for a while. The effect of this will be interesting to see in a years time.

A bit surprised they don't match Kiwibank's 3.55% for 1 year since they will go that low anyway. May as well publish it at 3.55% advertise it as a market leading rate and look like "the good guys"

"A bit surprised they don't match Kiwibank's 3.55% for 1 year since they will go that low anyway. May as well publish it at 3.55% advertise it as a market leading rate and look like "the good guys""

if advertised, they will have to give it--they likely to give it to you if you do not need a loan but might take one out if rates not that bad, if you do, may as well take advantage, typical of the big Aussie banks, at times.

Sorry I don't get you?

By advertising it they have to give it to anyone who asks and meets the low criteria.

By not advertising it they make it by invitation only and only give that rate to particular customers.

They've been doing this all year since ASB cut to 3.99%. Always trying to bump people towards the 2 year rate. Even with a split mortgage it's hard to justify going for more than 1 year fixed despite the minor difference in rate.

Well spotted. They must be having the correct Asset Liability Management system, perhaps.

With any luck, this will have the effect of reducing the big 4 super profits to their offshore mother ships.

What other essential business has an 18% return on equity? If 6% is good enough for the utility companies, it should be good enough for the banksters.

We finally have a reserve bank governor; who I use to play soccer with, with some nouse who understands the damage these monopoly profits being extracted to offshore pirates is having on our local economy. The past governors were either inept, or lap dogs to these pirates.

Time to bring in some legalisation to restrict controlling stakes in companies that have more than 20% market share to local residents, who have a vested interest in sustainable economics. One may have to stagger this over a period of 5 plus years, to avoid too much back latch from trading partners.

Have a great day.

BNZ has just cut rates as well to 3.59 for 2yr.. would say an extra 0.20% is still easily possible with negotiation

That's not what their website says yet, so must be effective later if so. I'm hearing very little negotiation under 3.55%. Remember TD rates still much higher than they should be, all things being equal

I would be interested in understanding why anyone would be locking in terms longer than 1 year in the current climate? Surely consensus is the OCR is going lower for longer, global growth is muted and geo-political risk awaits at every corner?

I fixed a month ago at 50% 1yr and 50% 2yr. I’m no expert in markets etc so figured I’d just spread my risk a little. If interest rates are lower in 11 months time then sweet! But a reduction from 3.79 to 3.55 on my full mortgage would save $7 per week in interest so not life changing either .

There is more to loans than just the interest rate you are paying!
The structure of the loan is just as important.
Some investors like to pay principal off however personally not a great fan of that as paying interest only allows you to make a lot more, but it depends on your yields you are achieving.
If you are negatively geared and a part time investor, then Paying P & I is a good idea.
Easy to make money with the Banks money rather than your own!

maybe the banks will come knocking on your door for their principal back, like they did in Aussie. Can't happen too soon.

Matching to the second decimal point the numbers of their competitors, that's what I call free market. As clients we have so much to choose from *sarcasm*.