ANZ raises a key mortgage rate, fixes its uncompetitive 18 month rate, and lowers some term deposit rates. None of these moves are market-leading

ANZ raises a key mortgage rate, fixes its uncompetitive 18 month rate, and lowers some term deposit rates. None of these moves are market-leading

(Updated: SBS have reduced their one year fixed rate to 3.39%.)

ANZ has changed two key fixed home loan rates, and made some small reductions to some term deposit rates.

It has chopped its uncompetitive eighteen month rate by -60 bps to a more competitive 3.39%. This matches a recent change from BNZ.

But they have raised their two year fixed rate by +10 bps to 3.55%. That matches ASB and Kiwibank, both of who raised this rate last week.

They are also taking -5 bps off a number of key term deposit rates from 3 months to 9 month. 

In financial markets today, wholesale swap rates moved up by about +4 bps after the Government announced it was loosening its debt-level standards and was taking up the role as the "fiscal friend" of the RBNZ. But today's move isn't major yet in of itself and isn't moving the general level away from historically low rates. At the same time, a modest rise in the exchange rate has happened as well. Both benchmarks however will be more responsive to Wall Street, and the US-China trade talks outcome, not to mention US retail trends in the lead up to the holiday season.

The room to move and react to rivals is perceived by banks as limited. Net interest margins are low by historic standards. The RBNZ has been keeping Net Interest Margin data since 1991 and this fell to 1.97% as at September, its lowest ever in this data. Margin protection will be a strong internal motivator, which is probably why we only see reactive shifts in pricing and only when they are necessary. Competitive impulses are being restrained. The move by some majors to raise their two year rate should also be seen in this light.

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 December 3, 2019 % % % % % % %
               
ANZ 3.65 3.39 3.39 3.55 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 3.39 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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14 Comments

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Hahaha, wouldn't be hiiiilarious if mortgage rates started going up again......

Get thee from this place blasphemer, we will not tolerate that sort of heresy in these parts!!
Next you'll be trying to fool our children into believing house prices can go down.

Begone, before we caste ye into yonder river to see if ye be a witch!

The USA, with the biggest economy on the planet, knows that low-interest rates are counterproductive, and so they set about raising them back to 'normal' not that long ago. How did that work out?!
Interest rates; mortgage rates aren't going up in the longer/even medium term. They can't, for the reason that you illude to - that would destroy the fundamentals underpinning our economy - the speculative residential property market.

None of the politicians is willing to ask companies to be productive and profitable, houses to be of reasonable price etc. All must be done to protect those who are benefiting from asset inflation...for as long as possible.

"Here is the full snapshot of the advertised fixed-term rates on offer from the key retail banks."

...except that ANZ advertised 1 year rate is 3.55%. Unlike Westpac, Kiwibank and ASB.

This time last year commentators were goading each other with post like "I'll bet you rates won't be below 3.5% before Christmas!". And last year, they weren't. But a year on....
So I guess we ought to start up the "I'll bet you rate won't be below 2.5% before Christmas" discussion going....

Sure, I think leading term deposit rates will dip under 2.5%

...and I see Simplicity are now underway with FHB loans.

Only 10 winners from the first ballot (and I wasn't one of them dammit), a small start, but a good move from them to help FHBs. And pretty tight lending criteria so they are not helping people over-leverage themselves. Hopefully it grows as time goes on.

too bad for the non 'winners'; wonder if it's really all just a marketing ploy. Pretty hard to get approved, pretty hard to get drawn.

the non-winners are no worse off than they were before, it has cost them ~1min to click a few buttons to enter a ballot. Nothing hard about it.

Not necessarily true. They had to move Kiwisaver to Simplicity, which may or may not be a good move (especially if the fund they're invested in is used to fund loans at a poor return for the risk of housing assets). Also, they may have held off (and may continue holding off) getting finance through a main lender, therefore missing out on a preferred house etc.

Now is the good time to fix your mortgage rate, dont expect OCR will go below 1% not even mention 0% as the government is planning a big infrastructure spend-up.

True, if wholesale rates are anything to go by

Wholesale swap rates are up +4 bps for the two year tenor, and +5 bps for five years and +7 bps for ten years. This compounds yesterday's sizable rise. If this holds, that will but the two year swap rate back to levels we last saw in early August, and back then the two year fixed mortgage rate was 3.79% compared to the 3.45% today