ANZ has moved to raise its fixed home loan rates significantly.
These rate increases come as wholesale swap rates have been becalmed very recently awaiting the US Fed signals on Thursday NZT.
But the increases are consistent with the signals the ANZ's economists have been sending in both New Zealand and Australia. And they are consistent with longer term wholesale rate increases.
ANZ home loan rates have been raised by between +26 bps and +35 bps (see table below). The result is a rate level well above not only their main rivals, but also the challenger bank community.
ANZ already had among the highest offers for the popular one to three year fixed terms. They are out on their own now, for a while at least.
They said when advising these hikes: "With high levels of volatility in global markets and increased inflation pressure domestically, there has been a significant increase in wholesale market rates."
"For home loan customers who haven’t experienced rising interest rates we understand this can add some extra stress, particularly with rising inflation impacting other household costs."
ANZ said they are talking to customers about extending the term of their loans if they face payment stress. We should note that these types of extensions can add significant extra interest cost to a loan over its lifetime, on top of the higher interest rates that will now apply. Use the calculator below, which will show the quantum of those extra costs.
At the same time as rate hikes are pushed though on the home loan side, ANZ are also raising their term deposit rate offers.
These are rising by between +5 and +35 bps. These will result in their six month rate rising to 3.35% and their one year rate rising to 4.10%. At these levels they are similar to some of their rivals and lower than some challenger bank offers. See here and here.
However ANZ's new nine month rate at 3.65% is higher than most for that term.
Wholesale rates are still pushing higher and that is in response to high inflation impulses and the market expectations of US Federal Reserve moves. Another review by our Reserve Bank is coming in early October, and markets are now pricing slightly more than a 50 basis points rise in wholesale positioning.
The next Fed review is on Thursday, September 22, NZ time, and financial markets are coming to accept that another 75 basis points rise is a live possibility. That means wholesale rates will face upward pressure even if the US faces growth challenges. The Fed has clearly signaled they are prepared to pay an economic growth price to get inflation back under control. If they don't their market cred will be shot.
And for New Zealand, that means we won't be able to avoid those upward pressures.
The next time we get a Consumers Price Index reading will be on October 18. That is now only about five weeks away. The best-case scenario is that inflation may have peaked in September with petrol prices having topped out. But the labour market remains tight, the NZ dollar is depreciating, and imported inflation shows no sign of abating. You would be brave to assume the September CPI will be significantly less than the June rate of 7.3%, so no relief in that department is on the horizon.
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 September 21, 2022 | % | % | % | % | % | % | % |
| ANZ | 5.50 +0.35 |
5.45 +0.30 |
5.65 +0.30 |
5.75 +0.30 |
5.95 +0.26 |
6.85 | 6.95 |
 |
5.15 | 5.15 | 5.35 | 5.45 | 5.69 | 5.79 | 5.79 |
 |
4.99 | 4.95 | 5.49 | 5.39 | 5.69 | 5.89 | 5.99 |
 |
5.45 | 4.95 | 5.45 | 5.69 | 5.89 | 5.99 | |
 |
5.05 | 5.15 | 5.35 | 5.45 | 5.65 | 5.75 | 5.75 |
| Bank of China | 4.95 | 5.25 | 5.25 | 5.45 | 5.65 | 5.65 | |
| China Construction Bank | 4.99 | 5.15 | 5.29 | 5.45 | 5.69 | 6.85 | 6.85 |
| Co-operative Bank [*FHB special] | 4.89 | 4.79* | 5.39 | 5.39 | 5.69 | 5.79 | 5.89 |
| Heartland Bank | 4.79 | 5.15 | 5.14 | ||||
| HSBC | 5.04 | 5.09 | 5.19 | 5.24 | 5.44 | 5.64 | 5.64 |
| ICBC | 4.99 | 4.95 | 5.15 | 5.25 | 5.69 | 5.89 | 5.99 |
 |
4.95 | 4.89 | 5.35 | 5.29 | 5.49 | 5.79 | 5.79 |
 |
4.89 | 4.69 | 5.19 | 5.29 | 5.55 | 5.65 | 5.65 |
Also updated with changes by HSBC.
Fixed mortgage rates
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Daily swap rates
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