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New Zealand's largest mortgage lender chimes in with home loan rate cuts of its own, nabbing the lowest rate for an 18 month term of any main bank. But it has raised its three year rate

New Zealand's largest mortgage lender chimes in with home loan rate cuts of its own, nabbing the lowest rate for an 18 month term of any main bank. But it has raised its three year rate

Now, ANZ has followed ASB and Westpac in tweaking its fixed home loan rates.

The nation's largest mortgage lender has cut its one year fixed rate to 2.25%, matching ASB.

More notably, it has cut its eighteen month fixed rate to 2.45%, a reduction of -10 bps, which makes it the lowest 18 month rate of any main bank.

Its two year fixed rate has also been cut by -10 bps to 2.59%. But that is not 'special' compared with any of it rivals, main bank or otherwise.

Going the other way, it has raised its three year rate by +10 bps to 2.89%, also matching ASB and Westpac. But both BNZ and Kiwibank have lower three year rates now. Kiwibank's 2.65% is a 24 bps advantage over ANZ, ASB and Westpac.

And ANZ has not made any changes to its uncompetitive 4 and 5 year fixed rates.

Since the January changes, wholesale swap rates have moved higher, including for the one year term, up 10 basis points. Short-term rate rises have been restrained by central banks, including the Reserve Bank of New Zealand (RBNZ), by large, aggressive secondary market interventions. In the case of the RBNZ, it is via their Large Scale Asset Purchase programme. They intervene to add demand so as to keep interest rates lower than they would otherwise be.

However, swap rates for three years are up 25 basis points, for four years they're up 35 basis points, and for five years they're up 45 basis points.

ANZ is unique among the main banks in that it has not yet accessed RBNZ's Funding for Lending program, so that isn't the basis for matching the 1-2 year rate cuts.

One useful way to make sense of these new lower home loan rates is to use our full-function mortgage calculators. Term deposit rates can be assessed using this calculator.

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 April 29, 2021 % % % % % % %
               
ANZ 3.39 2.25 2.45 2.59 2.89 3.90 3.99
ASB 2.99 2.25 2.49 2.59 2.89 3.19 3.39
3.39 2.29 2.49 2.59 2.79 2.99 2.99
Kiwibank 3.55 2.35   2.65 2.65 3.09 3.19
Westpac 4.15 2.29 3.25 2.59 2.89 3.19 3.39
               
Bank of China  3.45 2.35 2.45 2.55 2.75 2.85 2.95
China Construction Bank 4.70 2.65 2.65 2.65 2.80 2.89 2.99
Co-operative Bank (*FHB only) 2.29 2.09* 2.59 2.59 2.79 3.09 3.19
Heartland Bank   1.99   2.35 2.45    
HSBC 2.79 2.25 2.25 2.35 2.65 2.79 2.89
ICBC  2.89 2.25 2.35 2.35 2.65 2.89 2.99
 SBS Bank 3.39 2.29 2.39 2.49 2.79 2.99 3.19
 [incl Price Match Promise]  2.89 2.25 2.49 2.49 2.65 2.99 2.99

You should note that BNZ no longer offers a seven year fixed rate.

Fixed mortgage rates

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14 Comments

Without this ongoing massive intervention by the RBNZ, market interest rates would have been much higher. This manipulation of markets is unprecedented.
How long can the RBNZ sustain the housing Ponzi ? Until it collapses under its own weight ?
How much energy and ammunition does the King Cnut of the NZ financial markets (Orr) have left ?

When the 100 billion runs out. I remember in 2008 we looked down at the euro countries with their emergency OCRs and money printing, but now we have joined them.

Aren't these rates only for those with 20% equity? Fairly sure their 'standard' 1, 2 and 3 year rates are much higher.

yes, thats why the table says "Fixed, below 80% LVR".

20% or more equity has been 'standard' for mortgage lending in NZ for at least a decade now.

Really the 'standard' rates you are referring to would be better termed "sub-prime".

Smart move by banks to hook more customers before rates head north but will they keep them longterm ????.

Yup, hook in more (mug) punters who are borrowing eye-watering amounts on moderate incomes, who will be severely stretched in years to come by increasing interest rates and rising inflation. So whether that adds up to a 'smart move' remains to be seen.

I won't blame this solely on the banks. Those punters borrowing eye-watering amounts on moderate-incomes are also at fault here.

Scores of Kiwis have trouble living within their means when it comes to purchasing a home. Everybody wants the benefits of city life while still being able to grow tomatoes in their backyard.

Why borrow responsibly for a townhouse when you could get a low-equity loan payable over 30 years and hope their jobs and the OCR hold up long enough for them to build enough equity in the house to cushion adverse economic events?

Looks very good.

Just need to work out the comparison rates for a fairer comparison. HSBC seem to be very competitive across the ranges it offers.

ANZ trying to throw more fuel on the housing Ponzi. Sharon Zollner must be advising them that this is the correct course of action, seems to be an 'all-in' gamble on the Reserve Bank slashing rates yet again.

'See the flames higher and higher'.

No, it's a long term gamble that allows them to attract customers who only think 18 months ahead at a discount for the first two years before the higher rates that are coming kick in. Then the profit flows in.

Yep trying to lure people to the short end.

A contrarian investor would take the opposite view.

Can the floating rates go much lower, considering they're at the lowest they've been in decades? If you took out a sub-3% rate for 5 years now, the odds are very slim that the floating rate would be below that for any significant amount of time. The conditions are just not there for a repeat of the 2009~2015 shambles.