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Now ANZ joins the mortgage rate cuts as wholesale rates continue their retreat. These reductions by NZ's largest home loan lender come just two weeks before another expected RBNZ rate hike, but global markets are the driving force

Personal Finance / analysis
Now ANZ joins the mortgage rate cuts as wholesale rates continue their retreat. These reductions by NZ's largest home loan lender come just two weeks before another expected RBNZ rate hike, but global markets are the driving force
hair cut
Source: 123rf.com

Now ANZ has joined Kiwibank with fixed rate reductions for some home loan terms.

They have made four changes, but the most interesting one is their -36 bps cut to their 18 month rate. That takes the carded offer down to 5.29%, the lowest for any main bank and just 4 bps above the lowest 18 month rate in the market from TSB.

ANZ's trim of its one year rate to under 5% also involves a -36 bps cut from their prior rate.

And of special note is their -30 bps cut to their three year rate taking it down to a new carded rate of 5.69%, the lowest of any major bank for this fixed term.

These changes come as wholesale markets continue their retreat, and today local swap rates were part of this global shift, with the 3 year swap rate falling sharply again, among others in an extension of the flattening trend.

This decline is less pronounced for the two year term, non-existent today for the one year.

Falling longer term rates match local borrowers who are shifting to longer fixed term mortgage rates.

ANZ hasn't announced matching cuts to term deposit rates, but you have to wonder how long this will remain given the worldwide movements.

Borrowers seem to be more motivated by protecting themselves from the upside of potential home loan rates, rather than getting the last drop of savings by going short. Fixed terms of one and two years are shifting out longer, with three and even five year commitments becoming more popular.

The next OCR rate change is due on Wednesday, August 17, when a full Monetary Policy Statement will be issued along with intensive commentary, so we will get to find out the central bank's current thinking about these settings.

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 although break fees should be minimal in a rising market, they will start to bite in a falling 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 August 3, 2022 % % % % % % %
               
ANZ 5.15
-0.20
4.99
-0.36
5.29
-0.36
5.45 5.69
-0.30
6.85 6.95
ASB 5.35 5.25 5.65 5.45 5.99 6.85 6.95
4.99 5.35 5.59 5.39 5.99 6.09 6.19
Kiwibank 5.45 4.95   5.45 5.89 6.05 6.29
Westpac 5.35 5.35 5.59 5.45 5.99 6.29 6.39
               
Bank of China    4.99 5.29 5.29 5.69 5.89 5.99
China Construction Bank 5.35 5.35 5.65 5.45 5.99 6.85 6.85
Co-operative Bank [*FHB special] 5.09 4.99* 5.39 5.39 5.89 6.05 6.19
Heartland Bank   4.90   5.29 5.39    
HSBC 5.29 5.09 5.29 5.34 5.59 6.29 6.39
ICBC  4.99 4.99 5.39 5.15 5.89 6.09 6.19
  SBS Bank 4.95 5.15 5.35 5.39 5.49 6.09 6.25
  4.89 4.99 5.25 5.29 5.65 5.89 5.99

 

Fixed mortgage rates

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Daily swap rates

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Source: NZFMA
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Comprehensive Mortgage Calculator

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33 Comments

I guess the OCR will need to go up 0.75% on the 17th to make up for any shortfalls. They have got the excuse they need.

Up
4

The 'prophet' is getting nervous seeing rates drop... Will the prophet have faith that what they have been preaching will come true... or will they look like any other mug making false predictions...

Up
11

Hi Nifty 50 .

Swap Rates may flicker, but the OCR is on Fire.

Up
7

You guaranteed us. Dead cert. Mentioned more than once I believe.

The prophet was supposed to lead the flock to greener pastures. We cashed out everything.

If the prophecy is in fact lies, who can we trust?

Up
6

Still plenty of time for upwards movement. Be quick!

Up
5

I think he promised 7% interest rates…wtf does that even mean?! 

Up
2

If the prophecy is vague, it's so we can edit it in hindsight.

Up
1

Is it possible that the prophet was not a real prophet, but just some guy with an internet connection. Who could be so cruel. We have be all been conned. 

 Maybe Ashley Church is the real prophet? 
 

MMXX11 please let me know?

Up
4

What happens when the banks ignore the OCR rates/trends completely?

Up
1

They go Broke.

Up
3

Home loan pipe line dried up, special rates, cash backs…what else can banks do to attract business?

Buy one get one half price?  Time to get creative. Interesting times.

Up
7

They could be honest and self reflect about the problems and vast wealth disparity they have created and start making amends, starting by paying their senior execs way less, compensating those harmed by their incessant money creation and winner picking.

Up
2

Nah 50 is the RBNZ call now due to 50 by RBA swaps curve backing off.....    will  not help the property market at all as this is happening as markets pricing in earning reductions, layoffs, global recession, downgrades, possible start we are seeing possibility of global depression being priced in now....   lots can happen in a week.

Up
5

Are banks starting to get desperate to grow customer base, even if they need to take a haircut? There’s no doubt they can afford a bit off the sides and back!

Up
5

I think they are probably more worried about their commercial books and agri books right now....  insto probably ok in NZ as most are duopolies

Up
0

How are the rates drops desperate? It's just in response to falling swaps... 

Up
5

Giving yourself 4 upticks is Desperate, but Predictable .

Up
1

Lol, I wouldn't waste my time creating/logging into multiple accounts for upvotes...unlike the prophet perhaps?

Up
10

Not me, I only believe in 1 account.  Unless you are suggesting I have 40+ accounts ?

https://www.interest.co.nz/property/116973/number-homes-sale-has-more-d…

Up
0

“There’s no doubt they can afford a bit of the sides and back!”

 

No doubt they can, the money is there, just need a legitimate way to sell it and sell it cheaply.

Up
0

Yikes not sure I’d be fixing long at the moment. 1yr sounds about right. 

Up
3

I'm not so sure. This all has a panic / dead-cat bounce sort of vibe. I guess it all depends on how long you're planning your mortgage to run.

I'm happy to have locked in for 3 @ 4.5% about 4 months ago, paying at down @ 2x and figuring anything below 7% is pretty sound on a long run average.

One thing is for sure - however this plays out the banks aren't going to lose and i'll either foot the bill through interest, future taxation or inflation.

Plus ca change!

 

Up
1

How do you boil a frog?

Slowly.

Keep it calm by telling it that you won't turn the gas up any more, but you do. Bit by bit.....

Up
7

Hey, you should make an analogous theory about it.

Up
1

Prime suspect for a serial killer right here…

Up
3

bw = bank worker?

Up
0

In light of David's recent article highlighting the difference between deposit rates and the current 'risk free' rate, it really feels like depositors are on the road to taking a haircut at some point. Well, a sharp haircut rather than the regular trimming now.

Up
0

Where's that deposit insurance scheme at minister.

Up
0

An emergency cost of living allowance that desperately needed implementing is the latest thing to get in the way.

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0

Is it a trap ? Reduce now to hook people, raise later ?

Up
1

yes,bait for the trap,low interest then slowly jack it up once you are in and expect complacency or apathy will be their ally to keep you there. 

Up
0

Guys.. how does this wholesale funding works?

Swaps with some overseas interest rate ?

 

The funding via them appear as 'foreign debt ' ??

 

Naive question from a confused layman...

Up
0

Lending money is like any other business. You can set whatever price you like, but you can also price yourself out of the market.  The upward trajectory of interest rates has a real world limit, unless you are trying to engineer a crash and reset the system.

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0