The Red Bank has trimmed mortgage 'specials' across the board, with none of these sub 80% LVR rates over 3%. But their Standard rates aren't moving at this time

The Red Bank has trimmed mortgage 'specials' across the board, with none of these sub 80% LVR rates over 3%. But their Standard rates aren't moving at this time

Effective Friday, May 29, Westpac is cutting fixed mortgage 'special' rates'.

The result is that it gives a rate card, remarkably similar to BNZ's, especially for 'specials'.

This will mean that they have a market-leading five year rate at 2.99%.

At this time, there is no indication that Westpac is changing its Standard rates however, so they are unique in having a huge separation between 'special' and Standard rates. See more here.

If Westpac doesn't adjust them in this round, those variances we noted in the May 26 article has moved out to 136 and 140 bps.

And there is no information with this move on matching term deposit rate cuts - even though you would think it is very likely.

Westpac's 'specials' come with similar simple obligations as required by most banks.They no longer require "additional products".

The standard "at least 20% equity" is the core requirement, but like everyone else they also require you have salary credit to a Westpac transaction account.

One useful way to make sense of these new lower home loan 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 lowest advertised fixed-term mortgage 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 28, 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 2.79 2.69 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 2.69 2.79 2.99 2.99
               
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 2.79 2.79 2.95 2.95 3.39 3.49 3.59
Heartland Bank   2.89   2.97 3.39    
HSBC [May 28, 2020] 2.95 2.60 2.65 2.65 2.80 2.89 2.99
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%, which is unchanged in this update.

Fixed mortgage rates

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21 Comments

ANZ today agreed to match the KB 1 year rate for our portion (300k) which renewed May 10. Its a balance of how long do you sit on floating waiting for a lower rate. Plus we have a 3 year rate on a similar size portion coming due in a years time to consider. Where will we be in a years time on our 2018 78% LVR purchase I wonder..... hopefully not in an over 80% LVR situation let alone neg eq. Well we do like the house in any regard...

A years time? LVR at 100% or more?!
That's why we aren't too far away from 'fix as long as you can' before the equity available to do so .....evaporates.
Those who haven't borrowed yet, and socked it away, might want to have another look at that; and those that have commitments due may also want to do the same calculations that the above poster has done.
It's all easy, looking back!

bw, I know we see things differently so I'm interested to hear your opinion. I have just sold my house, I intend on renting for a year and see where the market goes. My house was mortgage free but I have multiple other mortgages on investment properties so I could use the proceeds of the sale of the house to repaid other mortgages, except that I'm tempted not to do so, your opinion if you don't mind ?

I'm in the same positions as you but I sold a rental (Freehold on my main property) but still had company debt which I have almost repaid ($4k outstanding on floating rate) with the idea of hitting the market again in the next few years and doing some angel investing - my opinion is pay off mortgages 1) reduces the temptation to spend 2) your not going to earn alot on a deposit 3) you'll reduce debt quicker ...all these will put you in a better position when you re enter the market. good luck!

Thanks for your reply Keene1. I'm not so sure I will be in a better position to buy if I repay the mortgage and raise a new one in 12 months vs keeping it and putting the money in the bank because the lending criteria in 12 months could be very different from now (that's bw's opinion I believe).

If you can afford it you may want to spend the interest saved on the lower rate on smashing the capital amount of your loan. As long as you can meet minimum repayments you should be fine (even if you go into negative equity) but banks will require you to pay at a higher interest rate if you go over 80% LVR.

Tried to get BNZ to match Kiwibank’s one year rate. They declined.

So, you're changing banks then?
Kiwibank will be after new customers at good LVR's. So use this opportunity to your advantage.
The days of having a 'bank for life' based on past banking history, are gone.

Hi bw. Well I have another 300k with BNZ that has two years to go. Looking at an 8k break fee. Am waiting to see what Kiwibank have to say.

Spoiler alert.. no one is giving you $8k cash unless you have a multimillion dollar loan

No, but I’m hoping they can make me an offer that’s worth taking!

Had the same yesterday. Wouldn't even do their two year rate of 2.69 either.

That's odd, since it is the BNZ advertised rate (now)

Sorry should have said, wouldn't apply the rate for one year at 2.69%

There are a lot of buy nz made buy local pitches going on. We save $5 billion a year as a country if we all switch to nz banks.... best buy local we could ever do. Wish they spent all that marketing money on the bank switch pitch.

plan to refinance to KB in a year all things being equal.

we purchased after returning from Australia and only one of us had a job at the time. ANZ were more generous in their preapproval amount given the circumstances and we were back to x2 incomes within a month of settlement in any case.

Had the same situation 1 year ago after returning from 10 years overseas. Had 60% deposit, 1 salary income and partners part time self employed. Had a small mortgage with KB already (rental). KB refused all applications for a family home purchase, I tried multiple times to stay with them via phone and meetings with mortgage manager, personally thought we were low risk. How can we support local when they keep sending you down the road to the welcoming Aussie banks who are more than willing to lend your family a roof?!

otherwise I would be with KB already. However if you adopt an inflexible credit policy.....

Anyone out refinicing with Westpac at the moment?