Finally, the last of the major home loan lenders has adopted what their rivals did last week - a 3.49% two year mortgage 'special'. That is a -5 bps reduction.
At the same time, ANZ cut most term deposit rates from 5 months to 5 years, and mostly by -10 bps.
It has been a week since BNZ clipped its two year fixed mortgage rate 'special' down to 3.49% and most of their main rivals have followed them down.
BNZ did this without moving their Standard two year rate, which is a pretty unique event - usually these standard rates dip in lockstep.
First to match them was Westpac, also adopting the 3.49% two year fixed rate without moving their standard rate.
TSB then moved their fixed rates down, all rates six months to two years, both 'specials' and 'standards' but their two year was only taken down to 3.59%.
Then ASB moved down, pricing their carded two year 'special' at 3.49% and cutting their two year 'standard' to 3.99' which now is the lowest two year 'standard' rate by any main bank.
And now Kiwibank says it will adopt 3.49% as their two year 'special' on Monday, September 30. Their two year 'standard' is being reduced too, but only to 4.24%.
Along the way, SBS also reduced rates for three fixed terms including two years and their 'special' is set at 3.59%.
This means that ANZ now has the highest two year 'special' of the five main banks at 3.54% so you might expect them to adjust down to the new benchmarks fairly soon.
So far, none of the main banks have shown any inclination to tread where some of the Chinese banks have gone, with the Bank of China offering 3.15% for two years fixed, China Construction Bank offering 3.19% and HSBC Premier offering 3.35%.
Before the August 7 RBNZ OCR rate cut, this two year rate was sitting at 3.79%. Since that official -50 bps cut, the two year fixed mortgage rate has been reduced by -30 bps and term deposit savers have been spared about 25 bps. (That is, the one year TD rate has fallen from 3.05% to about 2.80% and therefore only suffering half the OCR reduction.)
Wholesale swap rates have started dipping again after a brief firming flurry. But they are not yet back down to the levels we saw in early September.
Term deposit rates have inched lower at a few banks, but not at any of the majors in the past week. We understand one of them may cut some rates early next week however. These deposit rates have an out-sized bearing on how low the main banks can pitch their home loan rates, more so than wholesale 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 September 28, 2019||%||%||%||%||%||%||%|
|Bank of China||3.99||3.15||3.70||3.15||3.79||4.35||4.45|
|China Construction Bank||4.70||3.19||3.19||3.19||4.95||4.95|
In addition to the above table, BNZ has a unique fixed seven year rate of 5.70%.