Kiwibank makes a serious cut to its one year fixed home loan rate, besting all its major rivals. It also raises its one year TD rate, the first such rise for a term deposit rate in 2019, as wholesale rates turn up

Kiwibank makes a serious cut to its one year fixed home loan rate, besting all its major rivals. It also raises its one year TD rate, the first such rise for a term deposit rate in 2019, as wholesale rates turn up

Kiwibank is changing its pricing points for its home loan and term deposit headline offers.

It is trimming its one year fixed rate by a notable -16 bps to 3.39%. In fact, that makes it the lowest one year rate by any major bank by some margin. It is only bested by the three Chinese retail banks and HSBC. Two of them have one year rates at 3.15%.

At the same time it is raising its two year fixed rate by +10 bps. And that is notable too because that pitches it as the highest such rate among the main banks. But that is best understood in terms of wholesale swap rates.

Wholesale swap rates have turned up recently, having risen by +15 bps in a week and +30 bps in a month.

Kiwibank offers a $3000 cashback incentive for new clients who borrow at least $250,000 with at least 20% equity. This offer is due to expire in about a week.

At the same time, Kiwibank has boosted one key term deposit offer, raising its one year offer by +5 bps to 2.75%. While this may not seem like a material change, it does represent the first time that a major bank term deposit rate has risen in 2019 and the first rise by Kiwibank since November 2018. Among the majors, a 2.75% one year rate is the best offer at present.

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 November 18, 2019 % % % % % % %
               
ANZ 3.65 3.55 3.99 3.45 3.99 4.75 4.95
ASB 4.29 3.55 3.75 3.45 3.89 4.19 4.29
4.79 3.55 4.55 3.45 3.99 3.99 3.99
Kiwibank 4.29 3.39   3.55 3.89 3.99 3.99
Westpac 4.99 3.55 4.25 3.45 3.99 4.35 4.45
               
Bank of China 3.99 3.15 3.70 3.15 3.79 4.35 4.45
Co-operative Bank 3.49 3.49 3.59 3.59 3.89 3.99 4.09
China Construction Bank 4.70 3.15   3.15 3.19 4.95 4.95
ICBC 4.29 3.18 3.18 3.18 3.20 3.99 3.99
HSBC 4.65 3.35 3.35 3.35 3.35 3.35 3.35
HSBC 4.29 3.65 3.69 3.39 3.89 4.49 4.49
  4.35 3.55 3.55 3.45 3.89 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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19 Comments

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I fixed a mortgage last night for two years at 3.45%. Did I do the right thing?

Same. Time will tell I guess...

Yes, good call - I fixed for the same rate and term minutes after the OCR announcement. Rates were bound to creep up following no OCR change

Put a big TD down the day before the OCR announcement as many were expecting more cuts. Kiwibank not better than ASB, got 2.75% for 9 months, interest payed monthly which is a big difference over many banks which not only do not pay out until the end of the term, they are not compounding it either.

Yes. I still fixed a portion of my mortgage early in the year for 3.99% 2 year. The portion I'll fix next year will be 1 year given that the US has a high probability of going into recession.

A good rate but I think you know my thoughts, fix for 1 year. 1) rates likely to come down 2) shorter time to react to change

Yup I fixed 3.49 for 1 year on Thursday, had 3.45 for two as an option , but I think there will be cuts at some point in the next year

Wow, I must admit I didn't see that one coming, especially with swap rates rising. Awesome

As a taxpayer, not sure I love that there is 0.64% between their lending and deposit 12 month rate. Pretty slim margin there. Especially given cash, commission etc.

fractional reserve banking helps too..

You can probably get Kiwi Bank down to 3.29%

Currently in the process of switching to Kiwibank and have verbally negotiated an equivalent of a 3.01% rate. Not fully signed and done yet so take this with a grain of salt.

Did you manage to get the 3%? I'm being told they have no room to move and they can only offer advertised rates.

The times they are a changing. HIgher wholesale cost of money, higher bank capital adequacy requirements coming, maturing TD deposit money going elsewhere. Interest rates will rise and then where will non performing loans go.

to Kiwibank

They had already made the decision ahead of the OCR review. This is just a market rate "overshoot".

A deposit of 20% should give Kiwibank some comfort here.

While I'm not in favour of this stimulating continued house price inflation; which these low rates are encouraging in the regions (not already maxed out in debt), it is evident that its reducing banksters margins. This can only be a good thing, by keeping some of the obscene profit the big four are exporting offshore.

Bring on the increased capital retention for banks very soon however.

I asked for 3.45 for one year and was strangely offered 3.39% but for 18months. I didn't want to be locked in for 2 years at 3.45 as I do see a drop in the mid term 1-5 years.

Fresh off the press (or rather my banking manager) ANZ are matching the 3.39% for 1 year and also offering it for 18 months