The nation's largest home loan lender takes a chance and pulls up some key home loan rates, with most of its fixed term offers now higher than all, probably hoping its main rivals will follow soon

Here we go. A major bank is raising home loan rates (and deposit rates), up from rates already high and equal to or above their main rivals.

ANZ has taken the plunge.

Now every rate ANZ has for a fixed term of one year and longer is the highest in the market

Their one year fixed rate is up 20 basis points to 3.85%. Their 18 month fixed rate is up 10 bps to 4.25%. No other rival has rates this high for these popular terms.

They will be hoping their rivals follow. But there is no guarantee of that.

Finding qualified borrowers is harder these days. The Credit Contracts and Consumer Finance Act (CCCFA) regulations are just the latest impediment. Buyers who qualify are now almost all good risks and very bankable. So being uncompetitive on a rate basis is a problem. But not if the other main lenders follow.

The other lenders will now feel less pressured to 'match' when the nation's largest mortgage lender is moving up.

And borrowers will be very keen to get the deal done, especially if the perception in the market is that rates are going up from here.

One thing the ANZ hike does is reduce the premium between one year and a two year term. And the one-to-three year term. These have reduced to +50 bps and +90 bps respectively from +70 bps and +110 bps previously. That may push more borrowers out to a two or three year fixed term.

But that is a problem for ANZ because other banks now have lower two and three year rates. ANZ is pushing them to ASB's -20 bps advantage and -6 bps advantage for those same comparisons. For the other three banks it is -0 bps and -6 bps, so the advantage for those others is negligible. ANZ will be hoping ASB moves up from its 4.15% two year offer.

But larger premium advantages will apply at most other banks, and TSB in particular. A potential ANZ one year customer may look at TSB for example and see that they can get a 4.35% rate for three years fixed if they are moving now. That is a whopping -40 bps advantage. And it is not as though the TSB rate is about to move up. TSB set that 4.35% three year rate today, with a surprising -29 bps reduction.

These changes come ahead of the Wednesday, February 23 Reserve Bank Monetary Policy Review, challenger banks are jostling their home loan rates too.

Earlier, SBS Bank has raised some home loan rates.

And TSB has lowered some, or in their case, lowered more of them because they cut one on February 3, 2022.

The SBS rises still pitch their one year rate below the main banks (and TSB). They are above TSB for a two year fixed contract but remain well below the main banks. They are above TSB for three year, but well below the main banks for this fixed term as well. For four and five years they have given up their market-leading positions.

TSB on the other hand looks like it is getting more aggressive with some key selected interest rate positions, although none are market-leading.

But neither have rate positions that challenge Heartland Bank's offers.

Hanging over the RBNZ review are what Omicron will do to New Zealand, and what Ukraine will do to the international financial markets.

But the overall shift up has been all about rising inflation.

Wholesale rates have been rising recently from these inflation expectation pressures, but they fell back somewhat today on global risk aversion related to the Ukraine crisis.

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 February 15, 2022	%	%	%	%	%	%	%
ANZ	4.10 +0.10	3.85 +0.20	4.25 +0.10	4.35	4.75	5.65	5.85
	4.19	3.65	4.09	4.15	4.69	4.95	5.19
	3.99	3.65	4.09	4.35	4.69	4.89	4.99
	4.19	3.69		4.35	4.69	4.99	5.15
	4.19	3.69	4.09	4.35	4.69	4.79	4.95
Bank of China	3.49	3.49	3.69	3.99	4.45	4.65	4.85
China Construction Bank	3.65	3.65	3.85	4.35	4.65	4.95	5.05
Co-operative Bank [*=FHB]	3.39	3.29*	4.05	4.15	4.55	4.89	4.99
Heartland Bank		3.25		3.79	4.15
HSBC	3.94	3.49	3.94	4.15	4.54	4.74	4.99
ICBC	3.65	3.49	3.85	4.05	4.55	4.75	4.95
	3.79	3.55 +0.10	3.95	4.10 +0.11	4.55 +0.20	4.74 +0.15	4.95 +0.26
	3.60	3.60	3.90 -0.10	3.99	4.35 -0.29	4.74	4.90