With the Reserve Bank to review the Official Cash Rate on Wednesday, banks are realigning their mortgage rate offers.
They are also reacting to fast-rising swap rates - rises that some say have gone up too fast.
But wholesale markets are very fragile. After taking heavy losses earlier, international investors are wary of taking the other side of these risk-management instruments. That means they will only do so at sharply higher rates.
Today (Monday), ANZ has raised most of their carded offers.
They have followed ASB and Westpac with a 4.35% two year rate. But they have pushed their three year offer out to 4.75%, the highest for that term of any bank.
And ANZ's four and five year rates are now pushing on up toward 6%.
At the other end, BNZ is the only bank to offer a sub-4% rate for any term longer than a year, and that will probably disappear quite soon.
The current market pricing is pushing borrowers to one year offers.
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 22, 2021 | % | % | % | % | % | % | % |
| ANZ | 4.00 | 3.65 +0.20 |
4.15 +0.20 |
4.35 +0.20 |
4.75 +0.30 |
5.65 +0.41 |
5.85 +0.31 |
 |
4.19 | 3.65 | 4.09 | 4.35 | 4.69 | 4.95 | 5.19 |
 |
3.89 | 3.49 | 3.89 | 4.15 | 4.39 | 4.79 | 4.79 |
 |
3.99 | 3.49 | 4.15 | 4.49 | 4.69 | 4.85 | |
 |
4.19 | 3.65 | 4.05 | 4.35 | 4.69 | 4.79 | 4.95 |
| Bank of China | 3.49 | 3.29 | 3.49 | 3.79 | 4.09 | 4.39 | 4.69 |
| China Construction Bank | 3.45 | 3.45 | 3.65 | 4.15 | 4.45 | 4.95 | 5.05 |
| Co-operative Bank [*=FHB] | 3.49 | 3.29* | 3.89 | 4.15 | 4.49 | 4.69 | 4.85 |
| Heartland Bank | 2.90 | 3.45 | 3.60 | ||||
| HSBC | 3.69 | 3.29 | 3.59 | 3.84 | 4.19 | 4.49 | 4.69 |
| ICBC | 3.59 | 3.19 | 3.59 | 3.85 | 4.19 | 4.39 | 4.69 |
 |
3.79 | 3.15 | 3.45 | 3.69 | 3.75 | 4.29 | 4.49 |
 |
3.40 | 3.40 | 3.80 | 4.10 | 4.34 | 4.74 | 4.74 |
Fixed mortgage rates
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Comprehensive Home Loan Calculator
86 Comments
6% is going to be the new normal from mid next year. RBNZ will be powerless to stop it. The climb of that blue line is near vertical. RBNZ will try and send a signal to the market in 2 days time, wouldn't surprise me if they even did something stupid out of shear arrogance like make no change when clearly it needs a 0.5% rise effective immediately.
You may be correct in a years time but i think more likely they will drop shortly after. Not much has changed, too much debt, higher prices will be rejected once supply chain clears out and rates will need to drop once more. Just my opinion tho. The last 20 years shows nothing but lower and lower rates as an average. Who knows we could be at an interest rate peak and home loans could end up at 0.5% shortly. If you had made the prediction of 2.99% fixed for 5 years in 2007 people would have laughed at you but as we have seen there is simply too much debt for the world to sustain without rates low if not lower in the future. The only time i see real lasting inflation coming is when governments go true full time MMT with UBI across the board.
Do we ever get to peak debt? You can drop interest rates all you want, but even at 0% there is a point where people cannot afford to pay the principal. Likewise, lower rates = high inflation as we are witnessing currently. Drop rates again, inflation shoots up again, people have less disposable income to service debt, as we are seeing now. Dropping rates only increases spending for so long, and I'd say we can't be far off peak individual debt.
Yes i agree but as we have all seen Central banks will do everything in their power to drop rates and keen the ponzi going.
Yes there will be large scale debt write offs etc but only once we are at the very bottom of the heap and central banks cant do anything any longer. Im talking OCR at -2.0% and a bond market that is destroyed.
Then comes MMT and UBI and real sustainable inflation
Bond market is by far the largest market how is this going to be destroyed do you know what you are talking about as it is inflation is already hurting bond market this is why rates are going up and will not stop till inflation is down this is out of central banks hands.
UBI seems a natural destination as there are few folk left not on welfare - given wealth transfers via the pension, benefit, and to property owners. My welfare cheque from reserve bank and government policy has been pretty hefty over the last few years. Just remains to put the last few productive working folk on govt wealth transfers too.
With the 30% odd increase in prices this last 12 months alone you’d need a damn big drop in prices not just slowing to see negative equity, even more for those who bought over 12 months ago. Don’t see that happening in droves (especially with the RB’s lacklustre response thus far).
Yeah but those ending up buying at peak will be effected.
For FHB anytime is good to buy if buying within limits and not exposing themselves under FOMO but speculators / flippers should watch out though they have made heaps by now, courtesy Jacinda Arden and Orr ( Covid19).
The image in the headline is perfect :)
Herd mentality getting scr$#@
Now inflation, stagflation...has started to bite and reserve bank Governors will no longer be able to manipulate and kick the can nor can take cover behind printing and distribution of free money being easy solution as that has come to bite them and now unwillingly are forced to act.
Does anybody have anecdotal info on discretionary spending (I ask because it takes so long for the real data to come through)
Friends who own a Wellington restaurant have noted revenue is down per head almost 20% over the last few weeks (about a month). Still doing same number of heads but people are definitely spending less ie fewer drinks, shared entrees , no dessert, mid priced rather than high price meals etc.
They had thought it was just a pre xmas issue ie people saving for xmas - but they are now in the "function/ party" part of the season and the revenue is still down.
Is anybody else also seeing/ hearing this (Auckland excepted - for obvious reasons)
I've done this for a fair few years now. A glass of wine is about the same price as a dessert or starter. I'd rather try the chef's creativity than a high margin glass of wine as I get more enjoyment from the food.
I can always buy a bottle of wine later for the price of a glass and a half at the restaurant.
After months of being told how important vaccination is to protect our health, we're now being told that you still need to be afraid of COVID even if you're vaccinated; but only when it is spread by unvaccinated people.
It takes some real mental gymnastics to try and rationalise this story, and people's brains are getting tired of doing backflips all day trying to make sense of it. They can't be expected to believe that COVID-19 is both a threat and not a threat at the same time, and unfortunately fear always wins, so we now have a population of people who are both fully vaccinated and terrified of getting COVID-19. These people are going to be spending a lot more time at home, when we really need them out there spending money as part of our recovery. This is what happens when you try to rule by fear, and it's going to be hard to get this genie back inside the bottle.
A local hotel events manager, has noted that the Christmas bookings aren't coming though like previous years, and a lot are being cancelled, re-booked, then cancelled again.
Most of the reasons given are due to uncertainty. No one knows what level/light will we be at, or when. So how do you plan?
- how many people will be allowed?
- will unvaccinated be allowed?
- will people be able to travel from other regions to attend?
- what if there is a case? at the venue? or at the party itself?
Personally, I know a lot of companies are pushing the parties into late Feb/Mar hoping that things will be more settled then. Wil they? who knows...
No need to see, the evidence is here - average mtge $584000 say $600K average 3 year rate +2% = $12,000 a year more interest so discretionery spending down $230 a week and that ignores increase in rates/insurance/Food/Energy and the real figure will likely be north of $300 a week and will roll out as mtges are re fixed with future rates likely to increase more. The RBNZ stress testing of Banks and Insurers is an early warning sign. Higher interest payt to Bank = less Coffee/Restaurant meals/Movies etc = less Gst and later profits tax and more unemployment so the current clowns in Govt will see their revenue drop just as costs (Unemployment benefits ) rise - more taxes/more debt/less spending o dear a perfect storm in the making and the princess will be shown to have no clothes on.
Most would need an 18k gross pay increase just to cover the additional 2% interest . Some who fixed short term at tad over 2% are facing that now.
So if you are earning 80K you need 98k to stand still. So your employer needs to be able to give you a 22% pay rise !. Imagine if you borrowed a million in 2021 using mum and dads house as guarantee. Then you need 30K gross to cover.
I think some above posters are right. The rates will come back down just as fast. Coming up to election time 2023 the rates will be back in the 2's. The reserve bank is no longer independent.
Single point- I've cut $4k discretionary spending from my budget - it's all going on the mortgage to pay down as much as possible in the next 18 months before my fixed term comes due. It's hard though, with inflation this high now is the best time to spend, if you discount interest rate rises.
In the UK the Bank base rate is 0.1%. A three year fixed for a first home buyer is around 1.19% and a 5 year at 1.31%. NZ reserve bank rate is still only at 0.5%. What justifies the larger difference between base rate and retail rates in NZ? I know 0.5 is five times larger than 0.1 but it is still a low number historically.
Must be a lot of people with a second “covid escape” house or Bach that they could leave one house empty as interest rates were low… now it’s really starting to cost money - so either sell or rent it out.
But renting it out no longer permits a tax deduction on interest, and selling (if bought recently) triggers bright line. I wager most will sit tight hoping things will change - until the holding costs become unbearable and all race for the exit at once.
Yes and when they all sell what do they do with the profit?
I laughed when looking at a FB property investor page last week. The comment was along the lines of ‘I’ve just made $600,000 from an investment property but have no idea what to do with the money as I don’t understand investing’.
This exactly. I have been watching a certain area for a few years now. Plenty sold pre/post covid and are now back on the market at a lovely markup. One assumes the markup accounts for the brightline tax. Funny thing is, not that many are selling. The good ones go reasonably quick and the rest just sit there for months or get taken off the market. Fingers crossed for some bargains next year!
5 year fixed rates under 3 % not that long ago so lock the holding costs in at that level and no need to panic. I have properties outside of Auckland and followed this strategy, with the govt opening the travel bubble in the face of delta leading to long lockdowns and now reducing border controls with delta plus and other variants brewing I think people will be moving out of Auckland and using their bolt holes more.
The speed at which rising rates will be noticeable by everyone with large mortgages. But I worry most about those who bought recently on Interest Only terms. Keeping in mind the RBNZ figures show that ~30% of new loans are interest only.
In a few months time we could see people in a scenario where their fixed terms expire and find the cost of servicing their mortgage has doubled.
Interest only should be a tool at time of crisis but is the lifeline of speculators and the reason that they are able to flip.
Should have been stopped as many countries have but here in NZ irrespective of what any politicians may say but all want ponzi to continue.
This is the perfect opportunity for rbnz to raise OCR by 0.5% as interest rates are rising as it is and OCR raise will not have full 0.5% (otherwise also interest rate will rise).
Opportunity to correct themselves. OCR @ 1% will be healthy in terms of inflation and economy but will he, doubts.
The rates are still very low. Don't worry kiwi property buyers who buy same house from each other. Let's buy the same house 10 times using a RE agent.
The prices will go up 30% again in a year. Enjoy the gains. Stop all work and just keep buying houses and everyone will be multi millionaires.
Banks are businesses. It's normal for them to make profits. It makes sense that they adjust their rates once they've done their own analysis of the data before OCR decisions. This is because banks have a lot of costs to cover. They can not afford to move too slow.
What seems less normal given they are businesses is for us to structure our policy in a way that serves to push more of our wealth to them and have less circulating through our society, and for our people to become dependent on ever larger debt to fund spending.
Doesn't seem very business-y. More some sort of redistributionist political model.
No its not, the market is changing fast and the banks give you the option of a 5 year mortgage so who really knows what rates are even in 12 months ? Your really going to have to cover your arse if your the bank, no point giving people 4% mortgages when in 12 months time rates are 6%, they will be losing money.
At the start of the year a broker told a family member to fix their new home loan (considerable borrowing) for 1 year, because rates will stay low. I told them to split their new home loan into different fixed terms given this exact scenario of rates potentially rising. The family member did that and the broker just couldn't understand why they'd take higher rates for longer terms, he was actually quite pissed about it and made them feel like they were making a mistake...
I wonder how many FHBs have been given this advice and are going to be stung?
Let's stand back and look at what's going on here.
John Key's bank, and the others, don't act unless thy KNOW what's going to happen.
Something is. It's just a matter of 'what'.
We know the OCR is in the debating chamber - but how, exactly? The level; it's mandates - it's very existence? (NB: There was no OCR, for instance, until 20 odd years ago). So is DTI ; so are Lending Ratios (how much can be lent at various levels of collateral etc).
And here's the thing - The Christmas Break is always a good time to make ground-breaking changes, eg: Australia unexpectedly floated their dollar in December 1983. Christmas gives the community a happy time to evaluate change; react to it in a New Year, and go forward with the changes enacted.
Is the Christmas going to be one of 'those'?
Based on today's rises again after Friday - I think they're now sure 0.50 is coming Weds, and more in Feb.
A Christmas "gift" might be LVR shifting to 30/70... but that would really only hit FHB not investors with equity.
but I definitely think Debt to Income is coming sooner than later - and could even replace LVR outright... it doesn't matter what the value is, nor what your equity is... you can't borrow X, unless you have Y pro rata income to service it.
And that would put a dozen cats in front of every single freaked out pigeon.
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