Westpac raises mortgage rates again

Personal Finance / analysis

Westpac raises mortgage rates again, unafraid of having the highest 1, 2 and 3 year fixed rates of any bank, probably confident others will follow

4th Nov 21, 8:23pm by David Chaston

Westpac kicked off the latest round of home loan rate increases two weeks ago, and is now back with more good-sized rises.

These latest increases range from +10 bps for their six month fixed rate, to +30 bps for their 3 and 4 year carded rates.

And they are still pushing the boat out for the one, two and three year rates to the highest of any of the main banks - in fact the highest of any bank.

At the same time, both the Bank of China, and Heartland Bank raised their rates today. The Heartland Bank rates are still the lowest offers of any bank, even after the increases of about +50 bps.

Some steam has gone out of the wholesale rises in the past few days, but they aren't reversing. These new higher rates are holding.

One useful way to make sense of these changed home loan rates is to use our full-function mortgage calculator which is also below. (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. But break fees should be minimal in a rising market.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at November 5, 2021	%	%	%	%	%	%	%

ANZ	4.00	3.34	3.69	3.99	4.24	5.24	5.54
	3.99	3.49	3.89	4.15	4.39	4.75	4.99
	3.89	3.49	3.89	4.15	4.39	4.79	4.79
	3.99	3.49		3.99	4.49	4.69	4.85
	3.99 +0.10	3.54 +0.20	3.89 +0.20	4.19 +0.20	4.49 +0.30	4.59 +0.30	4.75 +0.26

Bank of China	3.45	3.19 +0.30	3.39 +0.20	3.59 +0.30	3.99 +0.34	4.39 +0.40	4.69 +0.50
China Construction Bank	3.25	3.25	3.59	3.99	4.25	4.55	4.69
Co-operative Bank	3.34	3.34	3.69	3.99	4.24	4.69	4.85
Heartland Bank		2.79 +0.44		3.15 +0.55	3.44 +0.54
HSBC	3.69 +0.45	3.29 +0.30	3.59 +0.30	3.84 +0.25	4.19 +0.40	4.49 +0.40	4.69 +0.40
ICBC	2.99	2.89	3.19	3.29	3.49	3.89	4.09
	3.19	2.99	3.39	3.49	3.45	4.29	4.49
	3.29	3.29	3.64	3.94	4.14	4.24	4.44

Fixed mortgage rates

Select chart tabs

Source: interest.co.nz

Source:

Daily swap rates

Select chart tabs

Source: NZFMA

Comprehensive Mortgage Calculator

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

22 Comments

by kiwikeith | 4th Nov 21, 8:57pm 1636012646

Westpac can see the writing on the wall. House prices are possibly at their peak so having the highest mortgage rates in the market makes sense for them at this point. Let the other banks take market share while houses prices are peaking.

by tulips | 4th Nov 21, 9:11pm 1636013518

Interesting except other banks will follow in the next couple days, so it's a race to the top

by MisterB | 4th Nov 21, 9:17pm 1636013821

I doubt that is the rationale. It will be about margin, last time the 1yr swap was at this rate, the average 12m rate = 3.94%, still some way above even these rates.

https://www.rbnz.govt.nz/statistics/b21-new-residential-mortgage-specia…

by morepork | 5th Nov 21, 10:41am 1636062063

If a bank wants to increase the profits on the mortgate portfolio, they can either a) issue more mortgages, b) issue bigger mortgages or c) increase their interest rate margin. a) requires increase in housing stock or taking share from competitors so is hard. b) is what the banks have been doing for years with rising house prices, but now that's slowing it looks like they're moving to c).

The growth in profits must go on

by MisterB | 5th Nov 21, 12:39pm 1636069191

except that this doesnt increase their margin versus say where it was a couple of months ago... refer to the wholesales rates... it does not even restore margin. We should be expecting more moves.

by taimaiakka0 | 4th Nov 21, 8:58pm 1636012722

RE lobbyist all out to support ponzi by creating FOMO...actually he is just doing his job as is paid for..

by ikimpaul | 4th Nov 21, 9:38pm 1636015109

Wow I'm really struggling to keep up

Thats now 4 rises in 4 weeks and .75% in less than a month.

If you were thinking a month ago - i should refix and haven't done it yet - then you would now be well behind the eight ball.

by Carlos67 | 4th Nov 21, 10:20pm 1636017652

yeah this is feeling like a daily event. This will cause a bit of panic that's for sure. just wait for the RBNZ to backstop this with a rate rise. Anyone still think that 0.5% rise is out of the question ?

by Rob Reid | 4th Nov 21, 11:22pm 1636021371

I'm sorry but I just can't think straight about it yet. I need to get over saying goodbye to seeing a negative OCR, which was like, last month's prediction.

by waymad | 5th Nov 21, 7:18am 1636049912

I prescribe some retail therapy to clear the mind. Go buy a House, they only go up.....

by Zen20 | 5th Nov 21, 3:41pm 1636080092

in flames?

by Colin Nemo | 5th Nov 21, 8:26am 1636054009

Higher interest rate just means kiwis are worse off as there's less competition for Chinese students and their wealthy parents that buy real estate and to store their illicit wealth from China. With lower borrowing capacity, it just means kiwis are punching wall whilst the Chinese elite just buy all the prime residential and commercial stock in cash at a lower price.

by MisterB | 5th Nov 21, 12:41pm 1636069286

So you would have lower rates so that kiwi's can borrow higher amounts for inflated asset prices? What could go wrong?

by Jarlaith | 5th Nov 21, 3:45pm 1636080307

Poor brave Kiwis, blameless pawns in evil China’s hegemonic machinations.

by Smudge02 | 5th Nov 21, 8:40am 1636054814

Hardly surprising being that we are still in “Emergency” low rates territory. If people thought rates were going to stay this low indefinitely then they need to learn to do their homework.

by fortunr | 5th Nov 21, 11:30am 1636065048

Exactly - anybody who just wanted to see knew perfectly well that these current ridiculously low rates are just not sustainable. Be ready for an OCR peak at around 3%.

by Smudge02 | 5th Nov 21, 1:14pm 1636071292

Its a bit like having morphine for pain relief and then when the pain is gone saying, what no more morphine!!! And just like people become addicted to morphine, we have become addicted to cheap credit and are about to go through withdrawals.

by JimboJones | 5th Nov 21, 2:13pm 1636074794

Weren't people saying that in 2008?

by Carlos67 | 6th Nov 21, 2:02pm 1636160533

The problem with the OCR is that its only loosely connected to actual mortgage rates. The big question is, what will actual mortgage rates peak at ?

by Small Kev | 5th Nov 21, 9:45am 1636058736

Soon new business demand will slow down or disappear for banks then they will offer new specials to attract new business again.

by FCM | 5th Nov 21, 4:03pm 1636081433

anything under 5% is still low for those that have been in the game for a while. But of course if you only been in the game for a few years at 2.5% then I presume this would be quite a shock (it should'nt be, but suspect it is)

by Miguel | 5th Nov 21, 4:14pm 1636082082

When rates go up by 1%, as they recently have, it doesn't sound significant, but as a percent change going from 2% to 3% is an increase of 50%. Highly leveraged, negatively geared and interest only loans are going to feel this. For P&I loans it won't change amount you have to pay each month too much, but for the 30% of owner occupier loans, and 40% for investors, using IO loans that means the monthly payments have increased by 50%.

I'm sure there are plenty of people with headroom, who haven't borrowed to the hilt, or are paying small mortgages on properties they bought when prices were much lower. But people who used the more relaxed lending limits set by the RBNZ in the past 12 months must be feeling a little uncomfortable.