Westpac matches ANZ and Bank of China with a one year 2.55% one year fixed 'special', a market-leading rate. Westpac also cuts almost all its term deposit rates

Westpac matches ANZ and Bank of China with a one year 2.55% one year fixed 'special', a market-leading rate. Westpac also cuts almost all its term deposit rates

Westpac is the first major bank to follow ANZ down to 2.55% for a fixed one year 'special' offer.

This is the new market leading level, one first adopted by the Bank of China.

Westpac's new rate is effective Friday, July 10, 2020.

It hasn't changed any other home loan rate, just this one at this time, the result of competitive pressure from a key rival.

However, Westpac has cut almost all its term deposit rates at the same time, trimmed by between -5 bps and -15 bps.

Update: BNZ has now also followed.

And it is still worth noting that so far, no main bank, in fact no other bank, has followed Kiwibank with its full and impressive -1.00% cut to its floating rate, down to 3.40% a rate lower than three of its fixed 'specials'.

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 July 10, 2020 % % % % % % %
               
ANZ 3.55 2.55 2.65 2.69 2.79 4.15 4.25
ASB 3.55 2.69 2.65 2.69 2.99 3.09 3.19
4.29 2.55 2.69 2.69 2.99 2.99 2.99
Kiwibank 3.55 2.65   2.79 3.25 3.45 3.55
Westpac 4.79 2.55 4.25 2.69 2.79 2.99 2.99
               
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
Co-operative Bank 2.69 2.69 2.75 2.75 2.99 3.19 3.29
Heartland Bank   2.89   2.97 3.39    
HSBC 2.95 2.60 2.65 2.65 2.80 2.89 2.99
ICBC 2.95 2.58 2.79 2.68 2.79 2.99 3.45
SBS Bank 3.89 2.79 2.89 2.89 3.39 3.79 3.89
 [incl Price Match Promise] 3.39 2.55 2.65 2.69 2.79 2.99 2.99

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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13 Comments

I fixed at this low (actually lower than that even) rate about two months earlier with the Chinese banks.

Good on ya Xi. I looked at BOC and CCB myself a couple of months ago, but after all the transfer fees and compliance-related costs were taken into account, it made no sense at all for any amount under a million. So I hedged my bets and stayed with Westpac and will (maybe) pick up their new rates for a year or two when the other 50% of our debt spread comes due.

When all the costs are included, the Chinese Banks offer NZ property investors very little in the way of short term savings, but I guess a person in your privileged position gets a free ride when it comes to refinancing? No transfer or legal fees plus a REAL AND SUSTAINED interest rate differential will make me think again.

UPDATE - Perhaps not eh, given Comrade Richardson's prominent role in your evil little enterprise.

1 year seems like a long fixed period in these times!

the big 4 are taking turns at lowering the bar like limbo dancers,can they get under one per cent for TDs by election day?

That is what the RBNZ explicitly wanted... 2 sides to the low lending rate coin.

The government will be getting quite a windfall from all the extra tax landlords will have to pay as more properties become cashflow positive.

Might not get any of that money for quite a while though, as you now only have to pay provisional tax if you owe $5k or more. So any property flipping in to cashflow positive territory solely because of interest rate changes won't have any taxes due until Feb 2022.

In other countries the mortgage interest is LVR dependent. So for instance 60% = 1.13%, 75% = 1.21%, 80% = 1.39% etc

I never see that kind of break down in NZ. Is it something you have to negotiate? Is there a spread based on the LVR of the borrower? I see "special rates" but they're just 80%, which is actually standard.

It's not "carded" but you can negotiate for better terms based on your equity (LVR). And LVRs greater than 80% typically attract an interest rate penalty on top of the carded rates, and you're also generally not eligible for the 'specials', so it's a double-whammy.

Westpac still shows 2.65% on the snapshot table.

Sorry. That is very embarrassing. Fixed now.

We're currently floating with Kiwibank at 2.9%. Leery of fixing just yet.

Why, when we are trying to restart an economy are Banks so keen to lend on over priced houses and very reluctant to provide finance to the commercial and rural (productive ) part of the economy. Interest rates for productive lending have hardly moved.

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