Days to the General Election: 27
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TSB joins ANZ offering a home loan rate of 2.79% fixed for one year. It cuts four other rates, two of them to below 3%. It cuts term deposit rates too

TSB joins ANZ offering a home loan rate of 2.79% fixed for one year. It cuts four other rates, two of them to below 3%. It cuts term deposit rates too

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
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 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
SBS Bank 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%.

Fixed mortgage rates

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32 Comments

I'm guessing this will be fairly quiet on the comments front. So here's a question: am I the only one who really wishes there was a downvote option in the comments, not just the upvote? I'd even be willing to put my money where my mouth is and become an interest.co.nz supporter over it.

18
up

Personally, I don't like downvote options. I think it encourages nastiness

Just like low mortgage rates

Huh. Well that's unequivocal and I concede the point. Obviously I'm reading the mood about as well as SB.

I love it how Trademe now only shows the total listing numbers for a split second before it disappearing and also the total listing numbers for NZ has now changed to "Over 32,000" rather than the specific number of listings.

Airbnb uses a similar tactic. For ex, if you look for vacancies in QT, you will get "300+ stays."

Hopefully formatting isn't too naff, here are the properties for sale on trademe yesterday evening:
region | sum
----------------------------+-------
Auckland | 10505
Bay Of Plenty | 2225
Canterbury | 4991
Gisborne | 119
Hawke's Bay | 646
Manawatu/Wanganui | 1129
Marlborough | 421
Nelson/Tasman | 606
Northland | 2491
Otago | 1809
Southland | 651
Taranaki | 681
Waikato | 3451
Wellington | 1641
West Coast | 666
Total | 32032

Nice! Wellington city is about 525 (that's excluding the Hutt, Porirua, etc.). Still really low volumes. Lowe & Co. sent me their weekly agent spruiker spam last night, saying they'd never seen it much lower than this (so prices will do well and they have strong demand). I've definitely seen in the 300s though last Winter I believe. Still, quite painfully low for the capital.

Auckland
21/5/20 | 10541
21/5/19 | 13384
17/5/18 | 12329
21/5/17 | 10733

Avocado

I've noticed that.Must be all about protecting the ponzi.

As much as I'd love to attribute it to malice, I'm not entirely sure. I've been tracking the TM listings for a long time, and this same thing did happen once before (e.g. where it only appears briefly during page load and then is hidden).

2008 was it? haha

No. Maybe 6 months ago, for about a week?

This will be as much about protecting the existing pile of over leveraged households as it will be about stimulating credit growth to stop the ponzi collapsing.

No one is over leveraged at all.
If Banks have lent to them, then servicing was not a problem at that stage and interest rates were higher than what they are now.
If people are unable to pay their bills now, that has nothing at all to do with being over leveraged on their borrowing.
What it will be is that had a job Or business that has disappeared Due to the unnecessary extended lockdown due to a mid range virus.

Out of interest TM2, when you were doing your real estate gig, did they ever teach you about biases and heuristics?

Or how often did you go to the confession box? Or do you have a regular sessions with the parish priest?

He's still doing agent work. Some of his ignorant comments about the rental market strongly suggest that.

Fritz, Interest.co is a site designed to help people make financial decisions.
If we readers read many of the comments on here, most would be very depressed.
What I say is that there is an alternative to the doom and gloomers, and if you tapped into the knowledge that successful people have, then in most cases, you too would be far better off financially

Here's a good heuristic to help people make financial decisions:

1. Come on Interest.co comments
2. Look at what The Man is advising
3. Do the opposite of that

Biased? Not me, just tell it the way it is, even if people don’t want to believe it.

Mid range Virus? If a down vote was enabled on this site the clicker would be running hot on your comments MAN..

Frazz, not a single death in NZ to anyone that had average health.
The only deceased were elderly with underlying issues.
Was speaking to a nurse today on the phone, she and all the Drs. she knew were stating that the actions that have been taken has been a massive over reaction and our health system and business system has been destroyed unnecessarily.

And yet I saw a NZ surgeon on TV last week practically in tears as he described how terrified the medical profession had been about what could have eventuated and how thankful they were for the government's actions.

I'm calling bs on your anecdote - an uncontrolled outbreak would have caused medics to have to risk their own lives and those of their families, potentially to work in a health system unable to cope and deal with massive numbers of deaths. It wouldn't surprise me if there's a heap of PTS in medical professionals on the frontline in countries that made poor decisions.

Doris, I say BS!
Have a look at Oz they didn’t shut down like we did and their death rate is buggerall.
Mostly the cruise ship and the rest homes.
For the lockdown we have financially stuffed the country for generations and business.
Why people got so scared defies logic !

Because we locked down early. You have plenty of conservative western government examples that haven't and are in real trouble. Even a liberal European example - Sweden.

And they are encountering a worse impact on their economies.

and all we have to do to keep the virus out is to become a more closed society than North Korea. Become more exclusive than the exclusive brethren

The way forward is not clear for any country. It's very early days yet.

Breathless hyperbole aside, you don't like the current government? Any specific aspects?

What would you have done instead of our response, which by the way is being lauded the world over.

"No one is over leveraged at all."
TM2, so how do you explain those mortgagee sales in the last GFC and soon to be deep recession?

I am talking about at the moment that no one is over leveraged on their housing compared to what their income was, as the Banks have a servicing criteria.
Most mortgagee auctions are due to people’s business decisions away from housing or they have lost their job and they don’t have the money to pay off debt.
Most rentals at the moment should be positively geared or neutral at worst, this is an amazing time to be in investment in residential property

Having worked in finance and insolvencies, most mortgagee sales in NZ are unfortunately triggered by a health event or injury to the borrower or a direct family member of theirs. A death spiral can ensue resulting from job or income loss.

The other major cause of mortgagee sales in NZ is the Pacific community gifting massive amounts to pay for funerals in the islands. Many lack life insurance and are expected to make huge contributions for big funerals overseas.

Overall, NZ has a statistically very low rate of mortgagee sales compared to other countries. Most people hang on to their houses in NZ one way or another even with job loss.

"If people are unable to pay their bills now, that has nothing at all to do with being over leveraged on their borrowing.
What it will be is that had a job Or business that has disappeared Due to the unnecessary extended lockdown due to a mid range virus."

*long, slow, exhausted sigh*

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