The next to raise mortgage rates is BNZ. And their increases are showing up a split in how banks are approaching these changes.
Despite long bond benchmarks seeming to top out for the moment, wholesale swap rates are still rising aggressively in the one to three year durations. In fact the two year swap rate reached 3.41% yesterday, the highest in seven years. The one year swap is now its highest in seven years as well at 2.84%.
Westpac is pointing out that 42 bps are baked in for the April 13, 2022 RBNZ Monetary policy review, so markets seem to be accepting a high chance of a +50 bps rise then. For the subsequent May 25, 2022 Monetary Policy Statement these markets have priced in another 44 bps, so coming to the view that we may get a further +50 bps rise then as well.
So in this context, it is a little surprising to see that BNZ did not change its one year fixed home loan rate, leaving it at 3.99% and matching Kiwibank's similar decision yesterday. At today's swap rate, that is a margin of just +115 bps (3.99% less 2.84%), an unusually low net interest margin (NIM) level for any bank. Typically they like to keep them around +200 bps. (The RBNZ Dashboard P3 shows Kiwibank's NIM at 2% and BNZ's also at 2%.)
Even their new two year fixed rates (Kiwibank at 4.85% and BNZ at just 4.69%) reveals margins of only +144 bps for Kiwibank and just +125 bps for BNZ.
You do wonder how long they can sustain such skinny levels.
There is less compunction raising longer term fixed rates, but both BNZ and Kiwibank have rate offers substantially lower than either ANZ or ASB for four and five year fixed rates.
BNZ's one year rate is unchanged at 3.99% and that is now a 20 bps advantage over ANZ or ASB. Their two year rate is now a +16 bps to +26 bps advantage over ANZ/Kiwibank and ASB. BNZ's new three year however isn't anything special, in the middle of these rivals.
BNZ seems to be eyeing an opportunity in this time of transition to snag some market share.
BNZ did not change their term deposit rates when they made these mortgage rate changes.
Westpac is not part of this review because they have not yet moved in this latest round. Their shift higher will no doubt happen very soon.
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.
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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 April 5, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.45 | 4.20 | 4.55 | 4.85 | 5.15 | 5.99 | 6.09 |
 |
4.49 | 4.19 | 4.75 | 4.95 | 5.29 | 5.89 | 5.99 |
 |
4.19 | 3.99 | 4.55 +0.16 |
4.69 +0.14 |
5.25 +0.46 |
5.60 +0.61 |
5.80 +0.71 |
 |
4.45 +0.26 |
3.99 | 4.85 +0.30 |
4.99 +0.20 |
5.45 +0.46 |
5.79 +0.64 |
|
 |
4.19 | 3.99 | 4.29 | 4.55 | 4.89 | 4.99 | 5.09 |
| Bank of China | 4.15 | 4.05 | 4.35 | 4.55 | 4.75 | 5.15 | 5.35 |
| China Construction Bank | 4.15 | 3.95 | 4.35 | 4.50 | 4.75 | 5.09 | 5.20 |
| Co-operative Bank [*=FHB] | 3.79 | 3.69* | 4.19 | 4.50 | 4.75 | 4.99 | 5.09 |
| Heartland Bank | 3.49 | 4.05 | 4.25 | ||||
| HSBC | 4.09 | 3.95 | 4.49 | 4.69 | 4.89 | 5.04 | 5.19 |
| ICBC | 3.85 | 3.69 | 3.99 | 4.25 | 4.55 | 4.85 | 5.05 |
 |
3.99 | 3.75 | 4.19 | 4.35 | 4.69 | 4.99 | 5.05 |
 |
3.95 | 3.95 | 4.39 | 4.55 | 4.75 | 4.99 | 5.09 |
Fixed mortgage rates
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Daily swap rates
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