The next out of the blocks to sharply raise home loan rates is Kiwibank.
And that only leaves ASB and BNZ to make their announcements, which are very likely to come later today.
Kiwibank's changes position it with minor rate advantages. These are a 10 bps advantage for a one year loan, just 4 bps for a two year loan.
However for 3, 4 and 5 years they have pitched their card higher than Westpac.
Kiwibank has raised term deposit rates at the same time, and here their new six month rate of 3.75% is higher than ANZ's new 3.60% rate and Westpac's new 3.70%. Kiwibank has a 4.00% nine month rate matching Westpac but lower than ANZ's 4.10% rate for that term. Kiwibank's new 4.50% one year TD rate is above ANZ's 4.30% and Westpac's 4.40%, and matches TSB's latest update.
How long these rates - mortgages or term deposits - can hold at the current levels is a live and open question.
Overnight, global rates raced higher, especially the benchmark US Treasury rates. As the local influences in wholesale markets around how the RBNZ will react to the sticky and high inflation levels (especially the nontradeables) tend to fade for a while, these global rates are energising financial markets with a new upward impetus. That means our wholesale interest rate markets will feel the steel of these pressures and keep rising.
So the retail mortgage and term deposit rates changes we are seeing this week are reacting to 'yesterday'. There is still to come the reaction to 'today'.
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 21, 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 |
 |
5.95 +0.50 |
5.89 +0.50 |
6.15 +0.50 |
6.29 +0.40 |
6.39 +0.40 |
6.39 +0.40 |
|
 |
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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Daily swap rates
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Comprehensive Home Loan Calculator
49 Comments
.. and a compounding interest rate calculator may tell one that 7% compounding interest over ten years doubles that money, that is for investing, and it would also calculate the same for debt.
After investing for 10 years at 7% interest, your $10,000 investment will have grown to $19,949 (or payable debt).
Do we still count on house prices doubling every 10 years to recover that debt? Hmmm...not so sure. Pay off the debt.
Having paid off a very substantial mortgage this year this makes me happy. Its basically an after tax guaranteed return of 7% going forward - pretty much impossible in this environment. Or to put it another way, the 7% I would be paying I can instead invest into equities etc at very cheap prices
The lot at ASB are the first of bank economists to see a 9.xx% rate appear in their crystal balls.
What can be done to pull the handbrakes on this unpalatable rise in costs - "Targeted support" from Robertson/Luxon? Price controls?
Meanwhile, Jacinda could go door-to-door hugging recent FHBs as part of her election campaigning.
With equity vaporizing faster than spilt petrol on hot concrete it is no surprise that people will now be refinancing back down to Standard Rates. North Shore has Crashed more than -28%, and that's with a population of over 200K. Lets not mention Wellington, south Wairarapa etc etc.
Let's have another look at those Interest Rates shall we ? Kiwibank has more 7s than any other bank. Strange how this is never mentioned .
Standard Rates for Standard People.
https://www.interest.co.nz/borrowing
It's amazing what you see when you look a little harder.
"This is the new normal for house prices"
"The government won't let house prices fall"
"The sooner you buy the better"
"They aren't making any more land"
"Your delay is somebody else's opportunity"
"Secure your future"
"House prices double every seven years"
"The best time to buy was yesterday"
Yip..lifes for loving not gambling on investments and anxiety. Balance risk.. understand the boom bùst cycle and how it can help.There is a tried and true formula.
1. Get a good education and a decent job doing what you love. 2. Buy the house you need, with room to grow, where you need and at a sensible time in the boom bust cycle for a sensible price with sensible rates or deals (our first house was at the bottom of a curve with a cash back depoist scheme) 3. Pay down the mortgage at a fast but not stressful rate and avoid shiny things 4. Once mortgage is gone learn to invest wisely across multiple markets and ùnderstand risk and markets. 5. As you get to middle age enjoy your family as you can work less and spend more time on passions and work will become more of a hobby.
For best effect dont hang out with, listen to or compare yourself with the 'gamblers' or spuikers on the way but hang with like minded folk instead.
Easy as. Probably has a 99% success rate but more importantly minimal stress.
Work less. Play more. Enjoy life.
Yes, using the interest.co.nz charts, the 2 year fixed mortgage of 5.6% is now back to late Feb 2015 levels where the 2 year swap rate was around 3.6%. Now, the 2 year swap rate is 5.2%...if banks were funding their mortgage books relative to swap, we'd be at 7%+ for fixed mortgages at the moment. So taxpayer subsidised funding via the FLP to banks to the detriment of term depositors/savers.
"Mortgage rates are high now, aren't they!"
No they aren't. They're slightly below the long term averages.
What is high though, by a factor of 2 or 3, of the RBNZ mandated CPI level of 1%-3%.
It would be a stretch to suggest that today's mortgage rates have to increase by a factor of 2 or 3 times, just to catch up to lagging monetary policy, but you just never know!
(NB: If we cross our fingers, maybe the CPI level will come back down to meet the OCR rate? Good luck with that!)
Here is the US 10 year with regression channel back to 1986. Something has changed. Perhaps the bond market is reacting to the decline in globalization, the peace dividend evaporating, a lack of investment in energy and boomers leaving the workforce all causing a prolonged inflationary period? https://i.imgur.com/jMmbqzx.png
so when LSP goes and a.75% increase in November --....... thats goign to be some serious challenges for anyone due to come off a 2year + fix from December onwards -- which i understand is a hefty number of people -
Now the prophet has been reincarnated -- Can we ask are we heading to 9% rates next year ??
Mortgage rate rises mean some bidders could lose deposit (afr.com)
great article WRT how much less a familly on $200k income can borrow now vs 6 months ago in Aussie,
SPOILER Alert - a lot less..........
Property correction is only going to get worse.
The following article popped up on the front page and quickly disappeared.
https://www.stuff.co.nz/business/property/300718271/a-global-houseprice…
Government and finance industry should have let the debt levels correct after the GFC, but did the very opposite, throwing fuel on the fire. Now many peoples lives are stuck with a home worth less than they paid and it's predicted to stay that way for many years and try to pay of that tsunami of debt while inflation rages.
If high unemployment occurs as many Economists are predicting, which makes sense as people are going to have considerably less money to spend in the Economy, there will be lot of very sorry suckers.
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