The mortgage rate increases keep on coming, today's from ASB.
ASB, who have the second largest mortgage book of any bank, have raised many rates to match ANZ, but have separated themselves with slightly lower levels for both the 12 and 18 month fixed terms.
The new ASB rate card pitches its 12 month fixed rate offer at 4.49%, six bps lower than either ANZ or BNZ, but now +30 bps above both Kiwibank and Westpac - and recall, Westpac reviewed its rates just yesterday.
ASB's rate for the popular two year term is identical to both ANZ and BNZ now, but +26 bps above Westpac and a massive +40 bps higher than the current offer from Kiwibank. If you are fixing now, that Kiwibank offer demands attention, although it is probably under review there as you read this.
There are now very few home loan rate offers that start with a "3" and almost all of those are 3.95% or 3.99%. They are a rare beast these days.
Since the beginning of March, wholesale swap rates have risen almost +90 bps. Since the beginning or April they are up more than +30 bps. And despite a hesitation on bond markets overnight, are not showing any sign of slowing down. Almost a full +50 bps is priced in to financial markets for the May RBNZ OCR rate review. In a few hours we will get the March quarter inflation data, and that will be influential on market pricing as well.
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 21, 2022 | % | % | % | % | % | % | % |
| ANZ | 4.65 | 4.55 | 4.90 | 5.25 | 5.55 | 6.35 | 6.45 |
 |
4.49 | 4.49 +0.30 |
4.85 +0.10 |
5.25 +0.30 |
5.55 +0.26 |
6.35 +0.46 |
6.45 +0.46 |
 |
4.39 | 4.55 | 4.90 | 5.25 | 5.45 | 5.79 | 5.99 |
 |
4.45 | 4.19 | 4.85 | 4.99 | 5.45 | 5.79 | |
 |
4.39 | 4.19 | 4.69 | 4.99 | 5.29 | 5.59 | 5.69 |
| Bank of China | 4.15 | 4.05 | 4.35 | 4.55 | 4.75 | 5.15 | 5.35 |
| China Construction Bank | 4.15 | 4.25 | 4.50 | 4.90 | 5.20 | 5.65 | 5.90 |
| Co-operative Bank [*=FHB] | 3.89 | 3.79* | 4.49 | 4.79 | 4.99 | 5.45 | 5.79 |
| Heartland Bank | 3.49 | 4.05 | 4.25 | ||||
| HSBC | 4.09 | 3.95 | 4.54 | 4.79 | 5.19 | 5.39 | 5.69 |
| 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 | 4.55 | 4.85 | 4.99 | 5.45 | 5.65 |
Fixed mortgage rates
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27 Comments
It is a Fire Sale.
The Vested Interest Brigade ( VIB ) are in full Panic Mode. The Sirens are Blazing. RE Agents are feeling the Heat. Smoking 2 packs a Day. Tim Mordaunt pleading with the sales dogs to Stay.. But the Listings keep piling up, No one wants to buy the Crash, No one can get the Cash, they turn direction and make the mad Dash.
It's out of control. No one can stop this raging beast of a fire. And yet they still try.
https://www.youtube.com/watch?v=LFCAYLJ7a6M
7% interest rates this year, Guaranteed . Very soon.
-30 Crash in Home Prices by December. Media already reporting examples of up to -38%.
Equity Evaporating Faster than Spilt Petrol on Hot Concrete.
Some People are in for a Shock when their Bank Manager tells them they No Longer Qualify for the Special Rates.
https://www.interest.co.nz/borrowing
People who thought they were Special, But are actually Standard .
https://www.youtube.com/watch?v=ccZwYSmdLKE
7% Interest Rates this year, Guaranteed. Very Soon, Maybe Next Month.
Cher Bro - Thank you for the encouragement . Here is another.
Home Prices Sinking Faster than the Titanic.
Is your equity still there to Qualify for the Special Rates ? or is it Standard Rates for Standard People. https://www.interest.co.nz/borrowing
People who thought they were Special.
https://www.youtube.com/watch?v=JvFkVaO-RFI
A lot of commentators expect inflation to peak this year, maybe it does, maybe it doesn't. But personally I think inflation will stay high for a while given the ongoing war in Ukraine and Chinas covid policy which just caused this latest round of lockdowns. The impact from both of these are still feeding through the system and will continue to be felt going into 2023.
Hutt Valley Market Update
This weeks update - starting to see fewer listings but also fewer sales. Stagnant at the top and bottom of the market. Please read to the end for those interested in the Rental Market- some interesting developments namely - a high number of listings and a drop in listings for rentals over $650 a week.
Current Market Listings
650 houses on the market- decrease of 15 on this time last week. Typically fewer houses list over the Easter period and this appears to be the case with only 31 houses listing in the last week vs the usual 40+ houses seen since the beginning of the year
Based on the REINZ data which showed that 96 sold in Feb and 104 sold in March giving an average sale of 25 houses per week– 655 houses means there is 26 weeks stock on the market.
House Price Reductions
306 houses have a listed price and again this week prices have continued to fall, although only 50% of the houses listed have reduced prices
The average markdown has fallen slightly to 67K. Previous reports have shown markdowns as high as 60% of the market. In the last few weeks more houses have listed with prices but fewer are reducing their prices. Looks like a number of listers are taking a longer wait and see approach , this could also indicate recent listings don’t have the same urgency to sell as previous listers may have had.
The data continues to show the majority of houses listed are under 900K. The Median house price for all 655 listings is now 849K. (10K up on last week – but back to where the median price was a couple of weeks ago)
Most sales on the market continue to be at the 800K-$1 Million mark. The bottom quartile is still sluggish with very few sales. The top of the market ie over $1.5M (currently 47 houses listed) is also sluggish with the last few weeks only 1 house a week selling in this price bracket.
.Houses sold vs houses removed
My records show 117 houses listed with a Price have sold YTD (total houses sold YTD is 256 according to REINZ) . I have records of a further 86 houses that have been removed from the market unsold YTD.
Length of time on the Market
Given how slow the market now is – I’m adding a new Length of time – which is houses that have been on the market for over 90 days- effectively these houses listed in 2021 and remain unsold.
- 431 of the houses have been on the market for over 30 days - 66% (last week it was 428)
- 274 of the houses have been on the market for over 60 days - 39% (last week it was 256)
- 193 of the houses have been on the market for over 90 days – 29% (last week was 130)
The percentage and number of houses on the market longer than 2 months is growing each week – indicating a stagnation of house sales.
Rental Market
Meanwhile the rental market has 180 properties for rent (up 5 on last week), up 60 on this time last year.
It was noted last week that rents are falling with a number of properties dropping their rental price up to $100 a week in order to rent the property. Average rental price reduction YTD is $48 a week and 40% have dropped their prices since listing.
I have also been noting how many properties are listed for rent over $650 a week. I use $650 because this is the price where it becomes cheaper to buy than rent (at $650 a week – someone can borrow $550 000 at 4.5% - average FHB loan is currently $548 000).
$650 a week in rent is also the point at which the average hutt valley house price (currently at $849K ) will produce a rental yield under 4% - anything under 4% in a market where capital gains are difficult to achieve starts to become an unattractive yield (especially when you can get 3-4% interest on a 2 and 3 year term deposit)
At the moment the percentage of properties listed at $650 or higher is 45% - the same as last week.
This time last year 35% of houses for rent in the Hutt were over $650
However earlier this year ie between Jan- March over 50% of houses were listed for rent at $650 or greater with the peak week been the 19th Mar when 54% of houses had a rent > $650.
What this is indicating is more houses are coming to market but at lower rents overall
Pity the 2021 Auckland FHB Cannon Fodder. 11000 of them borrowed 8 Billion combined. Average 727000 average each. The large majority of them fixed for 2 years or less. Average 14 k per annum interest cost rises are looming on the horizon for most. That's 20K of gross salary for those earning over 70K per year.
When interest rates fall, they fall quickly.....but so do the Term Deposits.
When interest rates rise, they rise quickly.....but the Term Deposits rise very slowly.
Win-Win right?? Banks are the true criminals. Right next to the NZ government and RBNZ. We are only pawns to their game. Collateral damage to them.
-7
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