Westpac is the next major bank to shift fixed home loan rates up sharply.
They follow Wednesday's lead from ANZ.
Although they match ANZ for terms 12, 18 and 24 months, they now have a lower card for longer terms.
Westpac has also raised its term deposit offers at the same time, basically adding +20 bps across the board from 5 months and longer. Their new six month rate is 3.70% and their new 12 month TD rate is now 4.40%.
Update: TSB has also raised fixed mortgage rates today, but nowhere near as aggressively as the main banks and leaving them with a substantial advantage over those that have already moved. But one feature of the TSB change is that it signals the end of any home loan rate offers below 5%
The sharp rises in home loan rates come as wholesale markets push higher. Locally the impetus was from the unexpectedly high September CPI number. But the real impetus is coming from global benchmark rates. The US Treasury 10 year yield rose sharply again today and it doesn't seem to be finished.
Bond markets are essentially judging that central banks haven't moved up fast enough or high enough to snuff out inflation yet. They are betting much more will be needed. And that applies to the RBNZ as well. Just a few weeks ago we though a +50 bps hike was a lot. Then suddenly a +75 bps possibility joining the conversation seriously. Maybe even more is on the table when the RBNZ next reviews the OCR on November 23, one that will have to carry them through to February 2023.
One useful way to make sense of the 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 October 20, 2022 | % | % | % | % | % | % | % |
| ANZ | 6.05 +0.55 |
5.99 +0.54 |
6.09 +0.44 |
6.19 +0.44 |
6.29 +0.34 |
7.19 +0.34 |
7.29 +0.34 |
 |
5.50 | 5.45 | 5.65 | 5.75 | 5.95 | 6.09 | 6.09 |
 |
5.49 | 5.45 | 5.59 | 5.69 | 5.89 | 5.99 | 5.99 |
 |
5.45 | 5.39 | 5.65 | 5.89 | 5.99 | 5.99 | |
 |
5.99 +0.54 |
5.99 +0.54 |
6.09 +0.44 |
6.19 +0.44 |
6.19 +0.44 |
6.29 +0.44 |
6.29 +0.44 |
| Bank of China | 5.25 | 5.35 | 5.45 | 5.65 | 5.85 | 5.85 | |
| China Construction Bank | 5.50 | 5.65 | 5.65 | 5.95 | 5.95 | 6.85 | 6.85 |
| Co-operative Bank [*FHB special] | 5.35 | 5.25* | 5.65 | 5.75 | 5.95 | 6.09 | 6.09 |
| Heartland Bank | 5.09 | 5.45 | 5.49 | ||||
| HSBC | 5.29 | 5.39 | 5.54 | 5.59 | 5.79 | 5.89 | 5.99 |
| ICBC | 5.35 | 5.25 | 5.35 | 5.45 | 5.69 | 5.89 | 5.99 |
 |
5.29 | 5.29 | 5.45 | 5.49 | 5.75 | 5.79 | 5.79 |
 |
5.25 | 5.19 +0.20 |
5.49 +0.04 |
5.59 +0.10 |
5.65 +0.06 |
5.75 | 5.75 |
Fixed mortgage rates
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43 Comments
7% Interest Rates This Year, Guaranteed !
10% Interest Rates Next Year, Guaranteed !
Rates are going 7 and Up.
Getting there.
Within Auckland, six of the seven territorial authorities had annual price decreases, with the North Shore’s the largest at 28.6% (to $949,000).
Prices were down annually in seven of the region’s eight territorial authorities, but South Wairarapa’s dropped the most with a 27.5% fall (to $700,000).
Economic fundamentals are finally reasserting themselves. It is going to be very painful for specufestors, with houses losing a big chunck of their values and returning to levels more sustainable and sensical, and interest rates reaching levels not seen in many years.
Time to pay the piper. Time to acknowledge that the fools' paradise of ultra-loose monetary settings is finished, once and for all. Time to rebalance the economy away from parasitic housing speculation and into the real productive economy. Time for many people to find a real job.
The problem banks have is they have bet the house on the house . This will restrain their ability to endlessly hike. The RB will not be keen on breaking the banks either . Pinch of salt , some of the inflation about is transitory and will fall back regardless of any OCR setting... it takes time for inflation to settle ,its not just a matter of setting a rate and watching the temp gauge drop like in a car.... bottom line is finding the correct settings wont be easy but it really is a matter of tread lightly...too heavy and it all goes down one dark hole rather quickly for all and sundry. So dont be so quick to tear into Mr Orr or the folk at the RB ... they didnt make you go buy a house... their conservativism is probably keeping the big bad Wolf from your door. Be careful what you wish for....
And we've already seen the RBNZ massively subsidising the Aussie banks, to the tune of - what - $9 billion at recent count? Of course, as ASB CEO Vittoria Shortt says, it's an "investment in New Zealand" not a handout to banks.
If things really go pear-shaped I wonder if we'll see Aussie banks threatening the government as happened in Cyprus, and the taxpayer being made to stump up to bail the banks out a la Ireland too. If so, I'd hope we have politicians with more the courage of those in Iceland, who made ensured banks bore the consequences of their risky behaviour too. Nationalise those who need a bailout? It would really just be taxpayers getting a little more for their money.
20% deposits won't be sufficient at this stage, especially for those mortgages doled out in the last couple of years.
40% deposits also won't be sufficient when you consider that investors have been tapping into their equity and potentially bringing their owner-occupied properties below the 20% level.
You can bet that there are some very nervous bankers in those banks working out their risk exposure and portfolio - I've had some of those high-level discussions.
It's funny how banks can move interest rates from super high, to super low, and then to super high in a span of a year or so.
How is this sustainable growth for the people? In a few years, once everything has crashed, they will start lowering interest rates (once again) to record lows. I wish the government has a bit more common sense. But I guess all governments are like this!
-7
19.75% seems crazy, however the DTI was only around 3x the average salary back then vs sometimes 10x currently in places such as Auckland. It was still reasonable to be able to afford a mortgage at ~20% when you could fund this on one income over time and still have children.
Am I alone in thinking that this made up by the RBNZ isnt this the start of Hyperinflation because from where I sit it certainly looks like this is going to happen. You can not double the debt of NZ with in 6 months and expect nothing to occur , oh but wait lets blame it on a war before that it was a worldwide virus. Im sorry but if you believe this BS good luck to you
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