TSB has joined ANZ (and the Bank of China) at 2.79% for a fixed one year 'special' mortgage rate.
2.79% is the market-leading low in the home loan market today.
ANZ's adoption of this rate will be motivating all its rivals and TSB is the first to respond.
In addition, TSB has dropped its 18 month and two year fixed rates to 2.99%. With those two extra changes, it has become the only non-Chinese bank to offer three options below 3%.
There changes changes come when wholesale swap rates have stopped falling. Pressure from the RBNZ may be motivating the offering of lower 'special' rates. Certainly all banks will be under increasing margin pressure. That is likely to be released by further cuts to term deposit rates. But neither TSB nor ANZ paired their home loan rate cut announcements with matching term deposit rate cuts. It is probably only just a matter of time, however.
Update II: TSB have now announced term deposit rate cuts, across the board.
Update I: SBS Bank has also cut rates for the three core terms, 12, 18 and 24 months fixed.
The trimming of many new rates to below 3% now by eleven ten banks opens the question as to why there are any rates above 4% any longer. And there are. Six banks have at least one rate on their rate card at 4% or higher.
One useful way to make sense of these new lower rates is to use our full-function mortgage calculators.
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options.
Here is the updated 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 |
 |
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 |
 |
4.29 | 2.99 | 3.39 | 3.65 | 3.99 | 4.09 | |
 |
4.79 | 2.79
|
4.25 | 2.79
|
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 |
 |
3.89 | 2.99
|
3.05
|
3.05
|
3.69 | 3.79 | 3.89 |
 |
3.39
|
2.79
|
2.99
|
2.99
|
3.39
|
3.79 | 3.89 |
In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%.
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