ASB has reduced their 18 month fixed home loan 'special' rate by -40 bps to 2.65%.
At that level, they now match HSBC and the Bank of China for that fixed term and undercut the carded rates of all their main rivals.
ASB has also cut most other fixed rates, except their already-low 2.69% two year fixed rate 'special'.
Their new one year fixed rate 'special' is now also 2.69%, a -16 bps reduction.
Their new three year 'special is now 2.99%, matching BNZ but not as low as Westpac's 2.79% rate for that term.
Their new four year 'special' is now 3.09%. Their new five year rate is 3.19%. Neither of these reductions threaten the lower rates at both BNZ and Westpac who have them each at 2.99%.
Similar reductions have been applied to their equivalent standard rates.
At the same time, ASB has cut its term deposit offers hard, with reductions of -10 bps to up to -30 bps. In fact, their term deposit rate card is now the lowest of any main bank and their highest offer is now just 1.70% for five years. The popular 6 month TD term is now only 1.65% and the one year term is now only 1.60%. No other main bank is lower. And it is probably a sign of things to come from the other main banks. There seems to be no competitive penalty for very low term deposit offer levels. Banks generally have more funds flowing in that they have demand to lend them out.
Since mid May, wholesale swap rates have risen about +10 bps but this has not stopped banks cutting both fixed home loan rates or term deposit rates.
Kiwibank's floating rate cut hasn't been matched by the main banks yet. It may not be until those big banks feel some pain from customers who shift away, attracted by the lower Kiwibank rate. To a large extent that will depend on the collective actions of SMEs. It is a move that is long overdue.
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 June 19, 2020||%||%||%||%||%||%||%|
|Bank of China||3.45||2.55||2.65||2.65||2.75||2.85||2.95|
|China Construction Bank||4.70||2.80||2.65||2.65||2.80||2.89||2.99|
|[incl Price Match Promise]||3.39||2.65||2.65
In addition to the above table, BNZ has a unique fixed seven year rate of 5.20%, which is unchanged in this update.