ANZ has kicked off next round of mortgage rate hikes, and backed them up with some term deposit rate increases too.
These come just one day after the bank's chief economist aired her view about what the Reserve Bank (RBNZ) will be doing with the Official Cash Rate, and a week before the US Federal Reserve is expected to raise rates there too, in a major signal.
The latest changes from ANZ aren't major - a small step in what could be a long relentless climb over the next few months.
And they also respond to rising wholesale swap rates, which rose sharply on Tuesday, and continued to rise today (Wednesday).
For those watching financial markets closely, these ANZ rises aren't a surprise. They start new pushes higher that will clearly put fast-rising pressure on household budgets that include mortgage repayments. And they will pressure landlords.
But we should note up front that not every borrower will be affected right now. Only those that roll over their fixed rate contracts. That will mean a slow but steady wave of impacts that may take up to three years to wash though all mortgage holders. Sadly however, RBNZ data shows that 70% of them will be affected within the next year. And all households will be girding themselves and adjusting their budgets in preparation (or should be).
ANZ's latest changes are:
- For a one year fixed rate, the increase is +14 basis points, taking their 'special' rate to 3.99%. This is a clear signal the period of home loans fixed at rates under 4% is nearly over.
- For an 18 month fixed rate, the increase is +14 bps also, taking that 'special' rate to 4.39%.
- For a two year fixed rate, the increase is +20 bps, taking their 'special' to 4.55%.
- They have not changed their three year carded rate which stays at 4.75%. But they have added +5 bps to their four and five year carded rates, taking them to 5.70% and 5.90% respectively.
We should also note that ANZ added +10 bps to +20 bps to most of its term deposit rate 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 March 10, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.19 +0.09 |
3.99 +0.14 |
4.39 +0.14 |
4.55 +0.20 |
4.75 | 5.70 +0.05 |
5.90 +0.05 |
 |
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 | 4.49 | 4.79 | 4.99 | 5.15 | |
 |
4.19 | 3.79 | 4.19 | 4.35 | 4.89 | 4.99 | 5.09 |
| 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 | 3.75 +0.26 |
4.15 +0.21 |
4.25 +0.10 |
4.49 -0.06 |
4.74 | 4.99 |
| ICBC | 3.85 | 3.69 | 3.95 | 4.15 | 4.55 | 4.75 | 4.95 |
 |
3.79 | 3.55 | 3.95 | 4.10 | 4.55 | 4.74 | 4.95 |
 |
3.69 | 3.69 | 4.19 | 4.35 | 4.69 | 4.99 | 5.09 |
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29 Comments
by printer8| 29th Apr 21, 4:04pm
That BNZ five year rate of 2.99% may not be around for that much longer.
Not crystal ball or Ouija Board - critically considering comments by RBNZ, and bank economists. But what would they know?
Would mostly likely even have been worth the cost of breaking.
Nzdan
Agreed
After a decade of largely historically low rates, not only haves they turned but the RBNZ and banks indicate that they will be going higher. Surety of rates will give peace of mind.
There is also likely to be considerable volatility in rates so choosing a rate and term wlll be challenging.
I'm still backing my bearishness on the OCR.
However, it's a contrarian view and may well be incorrect.
So preparing for the possibility of much higher rates when I come off my one year mortgage in late November.
Thankfully I'll have a car loan and credit card paid off in full by then. With those paid off, and an increase in mortgage payments, I'll be no worse than now on a net basis in terms of weekly outgoings (actually will be slightly better than now).
Helps that my 24 year old son left home 9 months ago as well! That's pretty much $125 - 150 saved on food and electricity pw!
What is the parable about giving a man a fish and teaching him to fish?
I have no problem that I am in the later and my four millennial sons all have bought homes on their own (two with investment properties). I funded their education and was happy to give advice and guidance when looking to property - but all else was on their own and they appreciate more so what they have personally achieved.
(I have since given each part of their inheritance early)
So much stuff already "priced in". Because banks need to offer a view out from 1-5 years time, they're basically estimating that from today's perspective. Cometh the time the OCR rises, it's often already been factored in by the banks, so they just up the floating rate and thats it.
Over the last 15 years, the best strategy has been to go with the 1 year, has saved me hundreds of thousands over the years and think it still has credibility even with interest rates edging up.
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