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BNZ makes some end-of-year changes to its Classic 'special' home loan rates with three raised and one lowered. Westpac also tweaked one rate

BNZ makes some end-of-year changes to its Classic 'special' home loan rates with three raised and one lowered. Westpac also tweaked one rate

BNZ is the latest main bank to raise fixed home loan rates. But is also trimmed one.

Following everyone else, and Westpac on Friday, it has adopted 3.55% as their two year fixed 'special'.

It has also ended its 3.99% rates for four and five years and that means only Kiwibank has a sub 4% rate now for either term.

At the same time, BNZ has trimmed -10 bps from its three year rate taking it back to 3.89% and a level that matches ASB and Kiwibank. That allows it some competitive brownie points against both ANZ and Westpav who are still at 3.99% for the three year term.

All of BNZ's (and Westpac's) recent chnages have been to their 'special' rates for LVRs of 80% or less. Neither made changes to their standard rates at this time. And neither made matching term deposit changes either.

BNZ's changes have raised the bar on TSB's Price Match Promise, and that is reflected in the table below.

Because the recent shifts have been rises, many borrowers who expected that very low rates will be around for a while yet may like to assess their judgment. If you don't have a roll-over decision quite yet, you may want to figure out the break fee cost if you want to lock in a current low rate. Using our break-fee calculator can help you with that decision.

This is the time of year when pricing becomes more standard and less competitive. Not only are transaction volumes tailing off for the holiday break, but banks will want to be in a position to launch eye-catching 'specials' when we wll return from holiday with house-buying on our mind and in the run-up to the businy March-April real estate period. In 2020 Easter will occur a week earlier than last year and in mid-April and that is when the summer selling season will peak.

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 16, 2019 % % % % % % %
ANZ 3.65 3.55 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 3.55 3.89 4.09 4.19
Kiwibank 4.29 3.45   3.55 3.89 3.99 4.09
Westpac 4.79 3.39 4.25 3.55 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     4.09 4.19

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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Home Buyers - Do not rush as no economy of the world can afford to move interest up as this low interest rate is new norm now.

Infact this new low may also be high if the OCR falls into negative territory and the moment anyone ties to raise the OCR will be hit so to avoid taking that hit - Current low interest is the norm for now and will be till Reserve Bank world over realises that falling interest rate is not helping much (Law of diminishing return) and are ready to take the bold decission of moving up slowly though eceonomy may be affected for a short while but is the need of the decade.

Take it you meant no western ind country?

Oh, another rate rise? I'll leave this here again:

by Nzdan | 14th Nov 19, 7:05am
Banks probably want interest rates to rise after a prolonged period of increasing loan book size. A bait and switch of sorts. Get everyone juiced up on low lending rates and then tighten up the vice on the balls.

Two thoughts:
(1) Banks rely on expanding the loan book, not maintaining it 'at higher rates', and
(2) Tightening the Vice, so to speak, risks killing one or more of your customers, and just a couple of defaults can ruin the productivity of the existing loan book.
Banks are just volume retailers like many others, Brisoces being my favourite analogy; they rely on turnover and, generally, putting up the price of debt won't attract more customers; dropping it will.
Competition for 'new' customers ( each others' existing ones) is what will likely win out here. So the headline % rate should be looked at in combination with the incentives ( cash backs' etc) that are on offer and will get bigger as a quiet market grinds on....

My original comment was in jest, but I'll still hang on to it if rates continue to creep up even if it's not the real driver of the increases.

There are 2 peaks one in March and other in May

If your property isn't selling, then leave it listed with the agents' at a higher price than it was last listed at. If it isn't going to sell, it may as well 'not sell' for a higher price.
Same with mortgage landing. If you aren't going to lend much over the slack periods, you may as wll 'not lend' at higher rates thas lower ones.