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ANZ cuts its one year mortgage special to 2.79%, lower than its main rivals and matching the lowest one year rate anywhere. Cuts most other fixed rates too

ANZ cuts its one year mortgage special to 2.79%, lower than its main rivals and matching the lowest one year rate anywhere. Cuts most other fixed rates too

ANZ has trimmed most of its fixed home loan interest rates.

Most of its cuts are not to market leading levels, but its new one year fixed rate 'special' is.

At 2.79%, it is the lowest fixed mortgage interest rate, and matched the current offer from the Bank of China.

And at that level, it is at least -20 bps lower than any of its main rivals.

But its one year rate isn't the only cut by ANZ.

Its eighteen month rate is down by -15 bps to 3.05%. This is not an especially competitive level.

Its two year fixed rate is down by -30 bps to 2.95%. That is a competitive rate, lower than any of its main rivals.

Its three year 'special' is down -64 bps to 3.35%. But that rate isn't too different to the 3.39% offered by BNZ and Westpac.

ANZ have also cut its four and five year rates but these were never competitive and the new levels aren't either.

Their announcement wasn't paired with any announcement on term deposit rate changes - but savers can be almost certain more cuts are coming in a day or so.

ANZ did say: “As always, we will be working hard to balance the needs to borrowers and savers in setting new deposit rates, although this is challenging in the current low-interest-rate environment.”

Here is the full snapshot of the advertised lowest fixed-term rates on offer from the key retail banks at this time.

Fixed, below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at May 21, 2020 % % % % % % %
               
ANZ 3.65 2.79 3.05 2.95 3.35 4.45 4.55
ASB 3.89 3.05 3.25 2.99 3.69 3.79 3.89
4.79 3.05 3.05 2.99 3.39 3.49 3.59
Kiwibank 4.29 2.99   3.39 3.65 3.99 4.09
Westpac 4.79 3.05 4.25 2.99 3.39 3.49 3.59
               
Bank of China 3.89 2.79 2.89 2.89 3.19 3.79 3.89
China Construction Bank 4.70 2.80   2.85 3.19 3.30 3.45
Co-operative Bank 3.09 3.09 3.35 3.35 3.69 3.79 3.89
Heartland Bank   2.89   2.97 3.39    
HSBC 3.49 2.80 2.85 2.89 3.50 3.60 3.70
ICBC 4.29 3.18 3.18 3.18 3.20 3.99 3.99
SBS Bank 3.89 3.09 3.39 3.39 3.69 3.79 3.89
  3.89 2.89 3.35 3.35 3.69 3.79 3.89

In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%.

Fixed mortgage rates

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89 Comments

If SBS doesn't pull finger it might be time to move!

About time ANZ pulled figure. Their lending margins are still 1.5% on equivalent deposits.

And on loans of $100 billion (their market share), this still equates to a gross marginal profit of $1.5 billion per annum. Meaning they make another $500 million out of fees go figure.

Time for Kiwibank & TSB to squeeze this margin more I reckon, as banks seem to be the only ones making profit during these times.

I think ANZ has already set aside $200 million-odd in anticipation of debt write-offs. I'd wager that's about to increase.....substantially.

My heart bleeds for them

2.79% for a year!
If you believe that housing is going to be dropping NZ wide, you are dreaming!
I am going to be in boots and all now, so you Doom and GLoomers, keep talking the market down.
The pay rises just keep coming!

17
up

Wow, talk about someone in an echo chamber!
You do realise that thousands of jobs are being cut left, right and centre. Or do you ignore the news?
Or choose to keep believing in your religion of property and greed?

He's taking the piss mate.

10
up

No, he's not. He drinks his own kool-aid. 1500 from fletchers, 1300 from AirNz, 130 from MYOB all in todays herald, but TM2 can't see the bigger picture, the blinkers are so tight they are really blinders.

No job losses in NZ's Skinhead Capital!!!!!!!

His beneficiary tenants have a steady income. He buys below "true market value" because he invests areas such as Aranui and Linwood. He doesn't need to worry about broken glass bottles strewn around the properties because Methylated Spirits come in plastic bottles.

Nah..knowing the MAN he is quite serious Kezza

Poor bugga has had a knock to the head.

TM2 is a bit like Karl Pilkington. You could easily mistake it for a kind of dry, deadpan parody act. But no, that's his actual real personality.

The main difference being that Karl is a pretty likeable guy.

I love Karl Pilkington, what else have we got in common?

We're both abrasive a--holes

Kezza, not taking the piss at all!
Why wouldn’t we be in, when we would be making $200 per week on most houses purchased now?
Investing is all about purchasing well and making the most of opportunities.
We have got no worries about purchasing now and people need housing!
If you aren’t buying well now, you never will ownN

Yeah but can people afford housing ? At a wild guess if enough cant afford current rents, and there is a glut of rentals, rents will head south, along with prices.

You should change your name to Bishop Oracle.

Fritz, losing your job is not a problem, losing your income is, very important difference!

?
Is that straight outta 'Rich Dad Poor Dad'?

I don't know if it is but think about it a bit more seriously, does losing your job necessarily mean losing your income? If so how much of your income is lost? Be a bit more open minded

Good God.

Is this some kind of pep talk you're road testing if any of your tenants lose their job?

"Yeah, I hear you, but you haven't lost your income"

What planet are you on?

Good God.

Have you really never heard of government support for people who lose their jobs?

What planet are you on?

So you're expecting people to be servicing mortgages with dole payments?

Or worse, assuming wage subsidie (if you've lost your job??) and other government subsidies are going to continue into perpetuity?

Com'on.
That's weak.
Even for you.

He's way past any sort of redemption.

dp.

Have you not got into slavery yet Fritz? Other peoples income is your income.

Mortgage rates are going a lot lower, for one reason only - the market is going to be (if it isn't already!) in real strife.

BW i told you i would update you this week. My settlement went without a hitch. Thank Fudge! Haha

Did you buy a first home avo? Congrats

12
up

From the boy2: "The pay rises just keep coming!" Wait until your tenants lose their jobs and move back in with their parents!

What is the ANZ trying to do?
On the one hand they are predicting massive price drops for residential property, but on the other hand they trying to encourage people to borrow.
Who would be crazy enough to borrow to buy a house only to see a 15% drop in value in the near future wiping out any equity?
Either the ANZ feels confident about the market, or it wants to oversee a massive sell down through countless mortgagee sales.
Choose one.

Its almost like they know now something we don't (such as a planned government guarantee of all mortgages)

It’s actually relieve stress on the already over leveraged so we have fewer fire sales to drag the market down even faster!

13
up

Banks like ANZ are trying to hold off negative equity. They're not really trying to attract new borrowers to take on mortgages. They're trying to keep property prices from dropping too much and taking the pressure off existing borrowers so they can keep paying. Otherwise they'll be inundated with mortgagees which is very bad news for everyone.

Wow, that's the best comment you've ever made CJ099

They should have gone 1.79% then. That would possible slow the slide but not stop it.

What?

Why is it binary?

Little room let for lower rates, and Im not sure how the free TVs worked. Banks pulled the trigger in 87 and it was a blood bath for the stupidly in debt. They didn't in the GFC provided and we only had a mild retrenchment. Thus Banks avoided the reset that was due and happened elsewhere (Ireland, US etc). On that basis I suggest NZ is more than due the ugly reset. Debt to average income multiplies clearly shows that.

First mover to clear bad loans is generally better off. Batten the hatches. They can just offer them all to TM2. Which bank will pull the trigger first...?

What they did post 08 was actually loosen criteria, extend terms from 25 to 30 years, increase income multiples and encourage more Interest only debt. Debt that is not repaid is money that never gets destroyed. We’ll have half the country renting from the banks n IO terms within the next 24 months.

There will be job losses no doubt, that is why property investing done correctly is far better than working for someone!
Prices in ChCh aren’t dropping when rates are so low!
Providing you do your proper checks etc. there isn’t much risk of losing rent,

Know your market and keep a sharp eye on your specific areas b4 diving in deep.

I do sometimes wonder who the most leveraged people are in this comment stream. Squeaky bum time I reckon for those that haven’t diversified beyond one area or are solely positioned in one asset class.

I realise you have property in ChCh so have reason to talk up the market but, really?
Clearly you are choosing to ignore the Corelogic report from last week, reported here, that put Christchurch as the second riskiest of the main centres behind Queenstown. Or the REINZ HPI last week that showed Christchurch prices having the second lowest annual rise in the country behind Franklin (which would have been affected by the dip in Auckland prices last year). Laughingly (or sickeningly depending on your position) I've seen RE agents talking up Christchurch based on that low growth on the absurd notion that it must be Christchurch's turn next! The reality, of course, is that the fundamentals in Chch have been poor for a while now, hence the low rise, and are soon to become much worse.
Following the earthquakes there was a drop in population over the next couple of years, followed by a rebound. The difference being that those raising the population were primarily involved in the rebuild, engineers, construction, labourers etc. Plenty of work. That work is drying up now. There is an oversupply of houses (see the stalled subdivisions) and the infrastructure rebuild is nearing completion. The traffic cones have mostly disappeared, the Northern and Southern motorways and convention centre are all nearing completion, followed by the sports centre. Where are all these workers going to get jobs. They can't all work on the stadium (if that goes ahead in the current climate). I know of construction workers that have seen the writing on the wall and have already gone. They will be the first in a mass exodus. Take a drive round the new subdivisions and look at the utes in every other driveway. How will they all maintain their mortgage payments?

Long Pockets, CoreLogic is not accurate at all in regards to ChCh market being vulnerable.
ChCh market has been Pretty flat for a few years I agree, and that is what makes ChCh the most stable market in NZ.
The opportunity for investors and owner occupiers to buy over the last few years has been amazing.
Yes there will be people that lose jobs due to the excessive unnecessary lockdown in NZ.
Disagree that subdivisions have stalled, there are heaps of sections Being sold and properties being built, and that is why our market is a true market.
Don’t intend to argue about ChCh prices dropping or not as it is pointless just like the economists predicting percentage drops, as they always tend to be always wrong!!
What I do know is that property investing has enabled professional investors to become financially independent due to realistic prices and great rental returns!
Will,that change in the future? NO!!

I am surprised that you have not learnt more about the fundamentals of money creation and the credit impulse - (appetite for increasing the level of debt in layman’s terms). Particularly given how much time you spend on this site. House prices rose in NZ since 2010 because our household debt rose from 140 billion to 280 billion - a doubling of debt achieved by ever lower rates and increasing the amount of debt by encouraging more interest only investors/fools into the belief that prices always go up. It was a great time... but it is over and will painful for those that mistook leverage for genius.

Not what "credit impulse" means...

Agreed, with all the cheap money floating around property might not have the correction it otherwise would have.

Other aspects of our economy will be going to the dogs though

For anyone who's curious about the technical name for TM2's investment style, in finance jargon it's called "picking up pennies in front of a steamroller"

Picking up rent payments is soon going to be like trying to pick up pennies behind the steamroller.

Never in NZ's history has it been a better time to be a borrower

If your LVR is sensible and your job security is high then I would agree.

Hmmmm and that RBNZ survey today said about half of people feel a bit nervous about their jobs....

"If your LVR is sensible and your job security is high"

So basically no one

We do exist. Public infrastructure is a good industry to be in at any point generally, as are many other public services.
Sticking with the basics (job wise) is generally a prudent approach.

And what's your LVR

See below.

I work in the defence industry and my partners a Veterinarian, shes just been offered a huge sign on bonus to work across the city at another clinic because guess what? We can't import our key workers anymore.

Doctors, Teachers, Nurses, Police, Engineers, Food producers...The jobs that benefit society and quite often get overlooked in boom times are the ones who are going to thrive in this economy. And they deserve it, much more than a real estate agent flicking houses off to foreign buyers.

I’m happy.
My wife is a school teacher on a permanent contract with plenty more pay rises coming down the pipeline in the next few years.
While I am the manager of a large family farming enterprise with pretty much no debt and good diversity of income.
We are also first home owners with a DTI of approximately 4x, LVR of about 75% and some other assets and investments that can be put into paying down the mortgage further if need be.
In my area most peoples employment is related to primary industries and essential services so there is not too much worry about job losses so I can’t see house values changing a lot, though I can certainly see how other towns will be more concerned with having a higher percentage of employment coming from the likes of tourism and manufacturing.

Not one to brag, but I bought my first home just under 3 years ago:
LVR = 45%.
Debt to Household Income = 1.5
Wife is a teacher, I'm with a large supplier to the Local/Central Government infrastructure projects market.

Borrow for what exactly?

Great question Dogboy, borrow for anything that produces income

Never in NZ's history has it been a better time to NOT be a borrower IN ANY WAY.
I thought I would be basically stress free once I got to <20% LVR earlier this year, now I find myself spending my spare time mulling over increasingly unlikely ways I could raise the remaining capital to be completely mortgage free in the extremely unlikely, but very recently introduced possibility that the entire world goes to sh.

So, you're in a $1m house in Auckland with a $200k mortgage. At 2.79% that is $5,600 per annum interest. I think the dole is around $12k per annum and that house rents for at least $30k per annum. Your anxiety seems irrational. Do you have a partner? (another $12k), get a flat mate.

Hahahaha. No thanks. Not in Auckland. Fixed on 3.09%. Still working. Partner is at home raising a baby.
My worry is definitely irrational, I hope, but I never would have had it before March this year. That's my point, we are in unchartered territory.

You're fine, my example was an illustration obviously.

Time to get that back up to 80% with 3 mortgagee rental properties. Jokes aside I'm not saying you are wrong but usually when everyone is saying that something is going to happen economic wise the opposite happens.

The government sponsored business loans came in at 2.55%, for once in my 10 years of business ownership I am ahead of specuvestors.

This reads like sarcasm but I assume you are serious?

These latest rates cuts are nearly the last of the fuel that can be added to the fire before things start to get cold around here.
Now who will make the most of these record low rates to pay down as much debt as they can, while they can?
And who will find themselves suckered into a debt honey trap?

this is signaling 'tight money'.
https://pbs.twimg.com/media/EYcf7G4X0AEn8L2?format=jpg&name=small

Rolls Royce to lay off over 9000 people

It reeks of economic sabotage, selling the bottom of the pyramid before the top 1% grab the wealth and head for the hills.

This rate is still too high compared to ANZ aust. Similar QE and at the same rate from RBA. The rate offered by ANZ Aust is 2.19% fixed for 1, 2 or 3 years. The Reserve Bank is warning banks not passing full effect of its cuts to borrowers. I am expecting even lower rates. Do not fix now until we get to low 2%s, may even go lower. If you are owner occupier or long term residential property investor doesn't really matter what your house is worth on paper. A savvy landlord should be able to hold property with zero income without too much stress. In the current market that should be your test before investing in property.

"Savvy".

That word is vomit inducing.

Smarmy ?

You're quoting a package rate, which works differently. 2.54% is the equivalent fixed 2yr rate. I see their 12m TD rate is 0.45%!! In NZ it is 2.10%

The other part of this is a fair amount of people out there who are struggling cant take advantage of these new rates yet as they are fixed for another 2 years or 18 months or whatever they fixed for.
This will help people but not all.

Tell me this is not happening.... all of the comments said that airbnb would not be used. So I've been banking on buying up cheap bnb homes where the vendor is strapped for cash and under pressure from de bank.
Covid-19 coronavirus: Airbnb New Zealand bookings leap, heading towards pre-virus levels
Covid-19 coronavirus: Airbnb New Zealand bookings leap, heading towards pre-virus levels
https://nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333458

Of course you wouldn't be extrapolating a long term trend from a too-small dataset now would you HW

My too small datasets still beat the thin air pronouncements though mr non-verbal. The report has you worried.

You do realise that is only domestic bookings? How much of the market does domestic bookings make up for airbnb?

Lol what am I worried about HW? Many small businesses are bouncing back to ABOVE pre-lockdown levels because there is some pent up demand from people being cooped up for two months. Clearly that is not an indication that aggregate demand has magically grown. It's a temporary post-lockdown phenomenon. The joke is that you took a temporary phenomenon and extrapolated it to forever, like you have with house price appreciation.

As for thin air pronouncements, here ya go: https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index

It will be a short term sugar rush as people look for cheap deals after coming out of lockdown. Would be surprised to see this continue (still 15% below pre covid levels to put in perspective) given the daily job losses that are occurring and the gloomy outlook.

Yup definitely sugar rush. There is no help in hell they will even manage 70% of pre Covid levels for more than a few months. Overseas visitors were massive. And even if by some miracle they did get 100% the very high room rates will go through the floor.

That is a perfect summation avocado... you have given me much hope kind sir to keep up my endeavours (heavy sarc)

Wait for it. When the hotels decide to reopen, and to get occupancy dump their rates to eye watering lowness, bye bye air bnb. Have a look at what hotels in the US did post 911 to encourage travel, when no one wanted to get on a plane.

The article says that bookings are way up on level four...

I can see every plane that comes into Queenstown and there are very few people arriving.

Given all I'll be able to buy with my term deposit income is a couple of beers (possibly three pints or a single jug) thank God Mr Bloomfield has ticked pubs open on his clipboard today.

But think about how much the principal is going to be able to buy, tomorrow!
Twice as much as it can today.....

Days to the General Election: 27
See Party Policies here. Party Lists here.