Kiwibank reduces one to five year fixed-term mortgage rates for borrowers with at least 20% equity, taking its one-year rate to a new record low

Kiwibank reduces one to five year fixed-term mortgage rates for borrowers with at least 20% equity, taking its one-year rate to a new record low

Kiwibank has cut its one to five year home loan rates by between 34 and 60 basis points, dropping its one-year rate to a record low 2.65%.

The rate changes are effective from Monday, and available to new and existing customers with 20% equity.

Kiwibank has dropped its one year rate to 2.65% from 2.99%, its two year rate to 2.79% from 3.39%, its three year rate to 3.25% from 3.65%, its four year rate to 3.45% from 3.99%, and its five year rate to 3.55% from 4.09%.

The 2.65% one year rate goes under the 2.69% two year rate announced by ASB on Friday morning, making it the lowest carded, or advertised, mortgage rate in New Zealand ever. 

Kiwibank head of borrowing and deposits Chris Greig says the bank "will continue to review our rates to ensure that we are competitive, and both our deposit and lending customers are getting a fair deal."

BNZ also made a range of mortgage rate cuts on Friday. The series of bank mortgage rate cuts come after the Reserve Bank, in its Monetary Policy Statement of May 13, said it wanted to see them.

"So far, we have not observed the pass through of wholesale interest rate reductions to retail interest rates to the extent we might expect in normal times," the Reserve Bank said.

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 22, 2020 % % % % % % %
               
ANZ 3.65 2.79 3.05 2.95 3.35 4.45 4.55
ASB 3.55 2.85 3.05 2.69 3.35 3.45 3.55
4.79 2.79 2.99 2.99 2.99 2.99 2.99
Kiwibank 4.29 2.65   2.79 3.25 3.45 3.55
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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41 Comments

15
up

The salient point here is that they are maintaining the LVR despite not being required to. Banks will be looking for "high quality borrowers" for these ever decreasing rates, just like they always have in every downturn, in every economy in the world, ever.

What good is QE if the tax paying majority don't no meet banks' credit criteria at the newly established low interest rates?

Gave kiwibank 90days notice on my savings 60 days ago. 30 days to go. Kick the can till then please bank.

If I was going to get a mortgage soon I would be doing a braveheart

hold............... hold.............. hold................

Its going much lower!

"Completely independent" ; ) Australian Corelogics Hedonic Price Index has suddenly halted due to there not being enough data to give an accurate price of housing. Strange that isn't it. Surely its got nothing to do with prices dropping off a cliff...... surely?

https://www.corelogic.com.au/research/monthly-indices

It's the daily index which is halted.
And yes. It is 100% because there is essentially no data for which to estimate the index from.

If prices were rocketing I can assure you that there would be enough data even if just one house sold per day.

Well, no there wouldn't be.
Because you cannot estimate the index based on one sale.

Probably wouldn't be too hard to work out the median price if just one house sold. Would be an easy amendment if it wasn't already part of the algorithm.

Baahaha. Convenient isn't it?

Not far to go now chaps. Not far at all.
Me? I'll fix everything if BNZ goes to 3.99% for 7 years, or 1.99% for two if they get sticky about the longer terms.
The drops are nearly at an end.

2.99% isn't bad for 5 years. Probably better to fix for 5 at 2.99 and float for 2 years than fix for 7 at 3.99, particularly if you make repayments at the 3.99% level

Breaking my Mtge as we speak and head over to KB on Monday (they are paying half my break fee)..
Happy days in mtge land

I doubt this will be the lowest rate by Monday. Welcome to catching falling knives.

The only way to get an accurate rate is to negotiate.

Would be good to get some tips on negotiating. The best I have managed is to get ASB to match the lowest rate I can find. They wont match China bank however . What have others managed to do and how? We re finance in August

What % cashback are they offering? My fixed term ends mid-June and I'm hoping to shop around

50%

Wait, so you borrow $500k and they give you a $250k cashback. That's where my tax is going eh ;)

Hopefully this comment was in jest..

Frazz, you're the one that said they offered you a 50% cash back.

Nearly fell off my chair reading your comment. You'll have to wait till after Xmas for that kind of deal.

Just have your eyes open chaps.
When there's a mad rush to break and re-set, it often signals an end to a trend.

Property investors worry is the extra tax they are going to be paying from the profit due to having to pay a lot less interest.
Forget about the ring fencing of losses, there aren’t going to be any!
5 years 2.99%, property investors delight!

As I wrote:
"Scrap Negative Gearing, NOW!" It isn't needed anymore.
(And, yes. 2.99% for 5? Very tempting!)

It has been scraped ..

"generally cannot use them against your other income"
https://www.ird.govt.nz/property/renting-out-residential-property/reside...

Frazz, no negative gearing hasn’t been scrapped!
The right to write off losses against other income yearly has been scrapped, but you can accumulate losses and then the losses are offset once the property makes a profit.
In some cases this will never happen if the loan is large and the rental income never covers the expenses!,!!
Reality is that the housing market is going to be so interesting and the opportunities to become financially independent has now been opened up to anyone that wants it bad enough!
Be in boots and all as with rates at 2.99% for 5 years why wouldn’t you??????

"In some cases this will never happen if the loan is large and the rental income never covers the expenses!,!! - " now there's a sound business plan?

The Man is a very savvy entrepreneur frazz, everyone knows step one in a good solid business plan involves loading up with so much debt that you can't break even

To be able to borrow money , you need to meet the Banks servicing criteria.

The majority of landlords leverage all the rental properties to 100% mortgage, interest only, and claim the interest cost back from the IRD.

That interest refund is then used to pay down the landlord's own mortgage.

Landlord then sells their "family home" and moves into a bigger house.

Rinse and repeat.

Sounds like a Ponzi scheme to me

Has anybody factored in that as mortgage rates reduce and the FHBs still with jobs pile in, house prices will remain buoyant, in Auckland particularly.

Have you factored in that those that could probably already have, and now that lending is getting tighter and bank expectations are falling prices, those that didn't won't secure a mortgage?

Most FHBs I know (well all) were planning to use their KiwiSaver as a deposit. That has now taken a decent hit, so unless (until) property prices take a corresponding hit, they are yet again priced out of the market.

Has anybody factored in that as mortgage rates reduce and the FHBs still with jobs pile in, house prices will remain buoyant, in Auckland particularly.

2.99% for 5 years…
5 years is a long, long time in uncertain times. As many know, for the last 4-5 years I have continuously been advocating to fix for 1 year, I might finally be changing tack, 2.99% fixed for 5 years… sure gives certainty in uncertain times at a very, very low rate (only 0.2% premium over 1 year)

T

Must admit, never thought we will see that kind of rate in NZ. 2.99% fixed for 5 years is pretty tempting but still doesnt cover interest cost after rent in Auckland. Its a good rate for owner occupiers. I also never fix past 1 year normally as circumstances change so quickly as we have seen with the current pandemic.

Usually HSBC leads the market with rates. lets see what they do next.

Chessmaster, if you can’t make money investing in property when interest rates are 2.99%, you clearly need to change tack!
Profit with this interest rate and less is a given!
Don’t know what castles you are talking about?

Money on the floor....and more to come.
Saw people queuing up at open homes yesterday evening driving home.

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