Kiwibank has joined the large Aussie banks and raised its floating mortgage rates following last week's 25 basis points Official Cash Rate increase.
It has also raised some fixed rates.
Kiwibank's floating rate increase is the full 25 bps, taking its new rate to 4.50%. But that is still below the big Aussie banks, who are between 4.85% (ASB) and 5.24% (Westpac). BNZ is the final major to disclose its change although it's 'old' rate is already 4.95%.
Kiwibank's floating rate become effective on Monday, March 14, 2022.
However, the real feature of Kiwibank's 'upgrades' are the fixed rate moves. The bank moved all its Standard rates higher by between 15 bps and 31 bps. But Kiwibank only moved three 'specials' up. Specials apply when you have a loan-to-value ratio (LVR) of 80% or less, and there are some other minor conditions.
Its one year 'special' rose by 16 bps to 3.85%, lining it up with its main rivals.
Its two year 'special' is up by 14 bps to 4.49% which takes it well above the prevailing rate the other big banks are offering of 4.35%. It is unusual for Kiwibank to lead higher. It may be expecting those rivals to move up soon too.
Its three year rate has risen by 10 bps to 4.79% and that too is above its main rivals but not by much.
A feature of volatile financial markets last week was the rise and rise of wholesale swap rates. Fixed rate increases by the main Aussie banks are likely to come this week if that wholesale market doesn't reverse itself - and that seems unlikely.
Another observation worth noting is that rates below 4% are now increasingly rare and almost exclusively just for a one year fixed term.
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 28, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.10 | 3.85 | 4.25 | 4.35 | 4.75 | 5.65 | 5.85 |
 |
4.19 | 3.79 | 4.25 | 4.35 | 4.89 | 5.05 | 5.25 |
 |
4.09 | 3.85 | 4.19 | 4.35 | 4.65 | 4.89 | 4.99 |
 |
4.19 | 3.85 +0.16 |
4.49 +0.14 |
4.79 +0.10 |
4.99 | 5.15 | |
 |
4.19 | 3.69 | 4.09 | 4.35 | 4.69 | 4.79 | 4.95 |
| Bank of China | 3.85 | 3.65 | 3.95 | 4.15 | 4.45 | 4.85 | 5.05 |
| China Construction Bank | 3.85 | 3.85 | 4.09 | 4.35 | 4.65 | 4.95 | 5.05 |
| Co-operative Bank [*=FHB] | 3.59 | 3.59* | 4.19 | 4.35 | 4.75 | 4.99 | 5.09 |
| 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 | 3.95 | 4.10 | 4.55 | 4.74 | 4.95 |
 |
3.60 | 3.60 | 3.90 | 4.15 | 4.35 | 4.74 | 4.90 |
Fixed mortgage rates
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11 Comments
Save housing at all costs, especially at the cost of disposable incomes - who needs to earn money the 'old-fashioned' way of working when your house can do it for you. All we need to do is go out and spend this unrecognised financial gain.
Our trade deficit is only going to widen from here on as higher living costs start to bite and we lose more skilled workers.
piqued my curiosity, by my crude calculation if took the TSB three year rate @ 4.15% you would need a re-fix rate of 6.5%* for years 4-5 to be comparable to a 5 year 5% rate (i.e. same amount of principle owing at the end of 5 years).
*assuming you used the saved interest delta from 4.15% to 5% and paid down principle at the end of year 3. Would be better off making a small payment each year against the loan.
The TSB three year rate is 4.35% which is a very competitive rate. On $500k, after 3 years of 4.35% with a lump sum principle payment each year of the interest savings when compared to 5 year rate = $456k remaining balance.
5 Years at 4.90% = $442k remaining balance.
If you came out of the 3 year 4.35% and fixed for 2 years for anything less than 7.5% then you'd be better off.
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