Westpac, the last of the main banks, has now moved to raise home loan rates.
Like two other rivals, Kiwibank and BNZ, they have refrained from raising their 3.99% one year fixed rate.
The net result of their changes leaves them with the lowest 12 and 18 month fixed rates among the majors, and with the lowest four and five year fixed rates.
This round of increases was kicked off by ANZ on Monday, March 28 and has taken until Friday, April 7 to wash through all financial institutions. Given the speed at which wholesale rates have been rising over this time, that seems like a slow burn to me. On Monday, March 28 the two year swap rate was 3.17%. On Thursday April 7 it had risen to 3.57%. This observer had imagined such a +40 basis points rush higher would have motivated bank treasurers to push though increases faster than they have.
Possibly the early movers, ANZ and ASB, are thinking about another rise soon. But with dawdlers around, the competitive risk is rising, especially as home loan transaction activity is sagging.
Of course there will be more transactions from rollovers than new ones generated by real estate sales activity, but banks will be feeling the top come off their mortgage activity with lower market churn. So every successful transaction is now more valuable.
Westpac has also announced +10 bps to +30 bps term deposit rate increases, with the popular durations at the low end.
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 April 8, 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 | 4.69 | 5.25 | 5.60 | 5.80 |
 |
4.45 | 3.99 | 4.85 | 4.99 | 5.45 | 5.79 | |
 |
4.39 +0.20 |
3.99 | 4.49 +0.20 |
4.79 +0.24 |
5.09 +0.20 |
5.39 +0.40 |
5.69 +0.60 |
| 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] | 3.89 +0.10 |
3.79* +0.10 |
4.49 +0.30 |
4.79 +0.29 |
4.99 +0.24 |
5.45 +0.46 |
5.79 +0.70 |
| Heartland Bank | 3.49 | 4.05 | 4.25 | ||||
| HSBC | 4.09 | 3.95 | 4.49 | 4.69 | 4.89 | 5.04 | 5.19 |
| ICBC | 4.15 | 3.99 | 4.35 | 4.50 | 4.85 | 5.05 | 5.25 |
 |
4.49 | 3.99 | 4.39 | 4.55 | 4.69 | 5.19 | 5.55 |
 |
3.95 | 3.95 | 4.39 | 4.55 | 4.75 | 4.99 | 5.09 |
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42 Comments
Every time I see someone post 7% rates this year I cringe. Think of what that will do to so many families, it’ll hit harder than a lot of you might think, especially the mountain of first home buyers in the past 2-3 years due to come off their fixed plans. If you want to see 7%, you will also see exponentially worse housing crisis, crime and pressure on the public sectors. If this happens; god help us all. Because none of us will be safe.
We could easily see a 7% rate in longer terms. Unclear whether they mean a 12 month fixed rate of 7%.... which would certainly be painful. It's not impossible though, given swaps are at 3% and probably 'only' need to move to 5% to make 7% retail rate possible.
I would hope most FHB over the last few years planned for an eventual 7% though and have been taking advantage of historically low rates to pay down.
And it will have been speculator greed infesting successive governments and central banking regimens that will have caused it.
At that point, it would be hard to blame young FHB for getting out their pitchforks and demanding action that isn't just yet another bailout for speculators - as we've had over the past couple of years - but is actually governance that has a little bit of regard for the renters and savers and FHBs who have been negatively impacted by the past decades' politics of greed.
I agree, this was awful to see and tone deaf to the blight of others. As a landlord it makes my skin crawl to see people banging on about completely underserved capital gains.
I have voted since 2017 explicitly on policy to lower house prices, I would very much like them to fall for the sake of our community and I believe that the only damage this would cause is to the set of FHB's over the last 3 years of so. We could look after them with a simple policy recognising the start of the latest ramp in values and give them tax relief to cover some/most of the loss.
Will be great when the 30% crash doesn't happen and we can add 2022 to the list of retired DGM accounts! The always lose and sadly they never learn. Some people just can't be helped. If myself and others had listened to them back in 2014 would not have the financial freedoms afforded today. In saying that, being a landlord for many great tenants is an important job and happy to do it!
"It didnt happen in 2014 so therefore it can never happen. Never. Happen". Interesting stance.
Some interesting facts:
Median house price April 2014: $430k
Median house price April 2022: $885k
2 year fixed rate 2014: 6.12%
2 year fixed rate 2022: 4.65% (swap rates are about the same, so shows retail rate pressure to lift definitely here)
Household income 2014: $84k
Household income 2022: c.$110k
So assuming 80% 30yr loan, as a percentage of gross income, housing has lifted from 30% to 40% of gross income, and that's with interest rates kept lower than you'd expect. If rates get back to 6% that's closer to 50% of GROSS income. With other cost of living increases, that's got to be painful and more importantly will mean people can borrow less... what do you expect to happen when people can borrow less. It's just maths, right?
Im just trying to understand why there is a belief house prices cant go down with rising rates when it was falling rates than inflated them?
And to add to Mrs B's comment,
The govt ant come to the rescue this time, OCR needs to increase to fight the corrosive effect of surging inflation.
Cant through $$$ at the problem as we have just splashed $60B in covid "support"
The only glimmer of hope is opening the immigration floodgates to the rich, maybe we can get a few russian oligarchs to spend their billions here
Not quite sure what point it is you're trying to make.
I am not a doom and gloom merchant, nor am I arguing with myself... i'm simply calling out that an assumption that house prices can never fall 30% because they didn't in 2014 makes no sense. Given the rapid increase in price - like over 1 tumultuous year - the risk is factually there. I am not saying it will happen I am just saying it's not impossible.
Feel free to make a cogent argument if you like.
I did not say 'can never fall 30%', that was all you Mrs B! My point is that DGMs have been forecasting a crash since 2014, at which point myself and others have been accumulating properties and doing very well off the rising market. My only argument is that DGMs are sore losers!
Give me a break... You Reas and "investors" had been trying to using media to create FOMO for many years to inflate your housing bubble, even made a statement that interest rates will never go up, which has been approved wrong in so many ways. Happy to see you became a landlord but please don't label people as DGM just because someone holds different opinions from you. That just makes you look stupid...
While providing 'human rights' to others, remember that you are also a member of society who has a social contract and responsibility to be a good human being - and if the golden rule is broken (treat others the way you want to be treated), there will be longer term consequences to pay (i.e. the social contract has been broken). Its a guiding principle of life.....if you abuse a position of power, you can get away with it in the short term, but karma always pays it back in the long run.
Humility is always a worthy trait when you find yourself in such a position (power over others) - which I'm sure with reflection, will understand. If not, our society has degraded more than I hoped for already.
Good move. I made the mistake of renting out a property in a similar situation. After getting the house up to healthy homes spec, the tenants made a shit tip of the property in only a couple of years. I'm now selling after weeks of repairs etc to the property. It's such a shame that there are too many tenants like that. They're often the first ones to complain there's no where affordable to rent.
Being a landlord is an important job. I respect all those who are up for it, taking on all the risks that are associated with it and continue to do so. Not so much for the greedy sharks that have bailed out after rinsing the less fortunate when given the opportunity.
There are more landlords who have this mind set than not. As I have said in other posts I am a long time landlord. I have bought 50% of my stock new, that is I supported the developer to build net-new houses. Of the houses I have bought that I bought from the market, 3 of those I bought as rent-to-buys and therefore there are three families who would never have owned a house that now do.
Investing is a not a job, much as investing in stock is not a job, I have 10-15 people working for me in their property service businesses who look after my investments.
At the end of the day my labour has bankrolled this portfolio, yes I have had the good fortune to have an excessive return on the portfolio and yes I recognise that my good fortune is directly in opposition to a young person starting out today but I do not see how I can be blamed for that.
I don’t think anyone is blaming landlords. Who can blame anyone for taking advantage of a unbalanced system. A system that lets operators run an “investment” (residential property) but does not class the “investment” as a business was always going to grow into something like where we are today with the current market.
As soon as it’s classed or called an investment (business) it should be treated as such.
ACC should be paid as per any commercial property.
Directors / landlord should be criminally liable as per any business / commercial property.
Council rates should be commercial as per any business / commercial property.
Finance conditions and rules should be treated as any commercial property.
The finance on a commercial property I own rolled over in Jan 22. A good, be it dated industrial, prime A1 Auck location. 20% debt to equity on building, 10% or less debt to equity if I add in all the security they have locked in from my other assets. Went to the bank to lock in a 3-4 year term. Response “no sorry we won’t lend beyond your current tenants lease expiry” which is 01/01/23. “we will only offer floating till lease expiry then balance must be paid, or if a new lease has been presented we will consider a term loan then”. We have never missed a mortgage payment in 8 years.
So I retorted “So all your residential investment properties” “Do you require payment of your loans in full when the tenants move out?” Bank reply, Hmmm, I have to ask my manager….
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