BNZ strikes with a hot eighteen month fixed rate, extending the 3.39% price point out longer just after others started raising two year rates recently

BNZ strikes with a hot eighteen month fixed rate, extending the 3.39% price point out longer just after others started raising two year rates recently

BNZ has cut two of its Classic fixed home loan rates, effective today (Friday, November 29, 2019).

Its one year cut of -6 bps to 3.49% isn't market-leading in any way, after Westpac cut their's to 3.39% on Tuesday. (Update: This sentence has been changed to reflect the recent Westpac cut. My apologies to Wespac for this error.)

But its new 3.39% eighteen month Classic fixed rate is quite special and market-leading among the major banks. And it represents a -116 bps discount from its standard 18 month mortgage rate.

And at 3.39%, that is a -60 bps advantage over the equivalent ANZ rate and a -36 bps advantage over ASB. Versus Westpac, BNZ's advantage for this rate is a massive -86 bps on a carded basis. (Of course, in real negotiation, these differences will be much, much narrower.)

For most borrowers, a 3.39% eighteen month fixed rate is worth knowing when you are talking to a bank. And TSB's Price Match Promise will apply to it as well.

BNZ offers 'Classic' specials to residential investor borrowers too, but at a +25 bps premium. For residential property investors, more equity may be required where Reserve Bank minimum equity restrictions apply

At this time, BNZ didn't make similar cuts to their standard home loan rates, so unless you have at least 20% equity you won't get any advantage from them in these changes.

Also, BNZ didn't announce any term deposit rate changes at this time.

It is the three other Chinese banks that remain with the lowest rate offers in this market.

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 29, 2019 % % % % % % %
               
ANZ 3.65 3.39 3.99 3.45 3.99 4.75 4.85
ASB 3.89 3.39 3.75 3.55 3.89 4.19 4.29
4.79 3.49 3.39 3.45 3.99 3.99 3.99
Kiwibank 4.29 3.39   3.55 3.89 3.99 3.99
Westpac 4.79 3.39 4.25 3.45 3.99 4.35 4.45
               
Bank of China 3.99 3.15 3.39 3.39 3.79 3.99 3.99
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 3.30 3.45
ICBC 4.29 3.18 3.18 3.18 3.20 3.99 3.99
HSBC 4.19 3.54 3.54 3.54 3.69 3.79 3.89
HSBC 4.29 3.65 3.69 3.45 3.89 4.49 4.49
  4.35 3.55 3.55 3.45 3.89 4.45 4.55
Price Match Promise   3.65 3.39 3.39     3.99 3.99

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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Good lord, is that BNZ logo real? It is.. very unfortunate.

I concur, its not 1st April is it.?
Oh, i see...... its supposed to be a downwards arrow.....

Bargain - and you might do even better......

TTP

Interest did something similar to ANZ's logo when they announced 3.39% for 1 year

Actually they've had these bastardised logos for all of the banks and have been using them on the "bank X cuts mortgage rates" articles since the surprise 50bp cut by the RBNZ.

interested in any commentors who are getting less than 3.39 in any term from a main bank.

Yes, looks a bit phallic.

Up the ... of ......... ?

BTW, as I posted before, on the date ANZ announced 3.39% for 1 year they also offered 3.39% for 18 months although this rate is not publicly advertised, it is sent out to their good customers. Why it was not advertised I ignore as it was a market leading (not matching others) rate

ANZ never announced 3.39% for 1 year. They just told interest.co.nz they'd offer it if asked. Big difference. BNZ 3.39% 18m rate also doesn't have to be asked for. I feel like we're on a slippery data slope here when we start calling out rate changes that never happened.

I told Interest that I got an email from ANZ that they're offering 3.39% for 1 year to all (min 20% equity) but yes, it's not advertised but neither was it a discounted rate.

If you only get it if a) you ask for it and b) you're a 'good ANZ client' then it's absolutely not the same as ASB and Westpac changing it to be their their advertised rate... which is for anyone (asking or not, existing or not).

I get that you're evidently a broker and you get emails from them, but that doesn't stop it from being a discounted rate. I see all sorts of comments from punters on here saying what rates they have been offered below the line and the table doesn't get updated based on those changes. I guess ANZ have greased the right pockets to get treated differently eh. And yes, I am an ANZ customer.

I'm so sick and tired of this central bank stimulunatic nonsense sacrificing savers and the prudent (elderly) to the speculators: I'm slowly taking my term deposits out of BNZ and Westpac as they mature, and have been doing so since deposit rates had a 2 in front of them - my line in the sand - sadly having to search out risk for some smaller increment of return (not equities, however - what an insane place to be right now). The banks always gouge their margin out of the depositors, so we know where BNZ deposit rates are going: down. If RBNZ does put the higher capital requirements on banks from 5 December, I don't know how the banks expect to comply ... I'd be fascinated in deposit (flight) figures with our banks since deposit rates went sub 3%.

It feels a bit like the eye of the hurricane at the moment, doesn't it?. It's all gone quiet and we have huge amounts of massively undervalued cash sloshing about The System. But we know the other side of the storm will hit at some stage. Whether is a reversal of what we have now, and we get a massive hike of interest rates and rampant, uncontrollable inflation, or far lower interest rates begot of the Deflationary environment, that very few people believed could even happen a few years back, remains to be seen.
But either way, your cash is going to be worth a lot more! Either future interest rates will reward you, or the future spending power of cash will.
What was that?! A puff of wind? No. Not just yet. It's Christmas, after all....
(NB: My money, literally, isn't on higher interest rates!)

It is hard to know the direction for interest rates (or if we get a catastrophic market/asset crash - which is needed to clear the huge malinvestments built on debt saturation - and then back to free markets - which we clearly don't have with central banking destroying free market price discovery - or more likely, authoritarian and austere governments). I reckon biggest mistake - of many, mind you - central banking is making is trying to stop the vital free market mechanism of recession to clear the bad investments and inefficient use of capital: that's what is chiefly zombifying our economies under debt.

I'm punting basically on low interest rates for as long as CBs can hold this lunacy together, and that's a long time, although I took half the money I had in bonds out and back to cash on RBNZ's recent pause in the OCR. It's the one sector I've made good returns in this year, albeit, giving some of that back lately. So hard to find a safe haven for savings: on the low rate for long time theory I'm also going into an unlisted commercial property fund (unlisted because while some good commercial properties companies on NZX and some good fund REITS, most of those NZX companies have risen by over 25% this year with desperate investors chasing yield (and collapsing it for themselves on higher prices paid), and that premium could be lost in a week or a day when markets hit the Great Reset, so unlisted gets me out of the immediate valuation risk.

But, tough environment. And you're right, I can see interest rates spiking up sharply once defaults start globally and we all finally get to factor risk in again. Well, those of us who haven't lost our savings.

I feel for you Mark and all depositors and I agree with both your posts. I do believe though that "the great reset" is still much further way than most think, mainly because all governments will do whatever they can to keep the party going. Therefore interest rates will remain low for a long time in my opinion, they simply can't go up significantly as there is too much debt out there which would plunge us into a deep recession, which no government wants to happen under their watch.

I missed one part above. I meant it's hard to know whether we get a crash to correct all the distortions caused by stimulunatic low interest rates, or, as likely, decades of stagnating economies and falling standards of living under an Everest of debt denying capital to innovation and entrepreneurs. The latter is just as bad (for the pension funds anyway).

The One Percent will always win, ask Prince Andrew and his banker friends.

I've always wondered why the banks have these 18 month rates that are so much worse than both 12 and 24 months. It doesn't make sense.