Westpac has reacted to ASB's shift to an inverted mortgage rate card. They too have inverted, and matched ASB at the long end.
But Westpac has been very much less aggressive with their rises at the short (high volume) end. And that has left ASB somewhat exposed.
Westpac's +10 bps rise for a 12, or 18 month fixed home loan rate puts them -25 bps and -20 bps below the new ASB levels. They match them at 2 years.
Now only BNZ and Kiwibank have rates lower than Westpac among the main banks.
Still, no main bank is anywhere near Heartland Bank's home loan rate card, none of which are over 6%.
Al challenger banks are still very competitive for mortgage rates of 2 years or less.
Westpac also raised term deposit rates for terms less than 1 year. That has made them more competitive in this space, but not market-leading. ASB also followed up its mortgage changes with RD adjustments.
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 January 23, 2023 | % | % | % | % | % | % | % |
| ANZ | 6.60 | 6.54 | 6.64 | 6.74 | 6.84 | 7.54 | 7.64 |
 |
6.84 | 6.84 | 6.79 | 6.79 | 6.69 | 6.59 | 6.49 |
 |
6.49 | 6.49 | 6.59 | 6.59 | 6.69 | 6.79 | 6.79 |
 |
6.50 | 6.39 | 6.65 | 6.79 | 6.79 | 6.79 | |
 |
6.59 +0.10 |
6.59 +0.10 |
6.69 +0.10 |
6.79 +0.10 |
6.69 | 6.59 -0.10 |
6.49 -0.30 |
| Bank of China | 6.15 | 6.25 | 6.35 | 6.35 | 6.55 | 6.65 | |
| China Construction Bank | 6.60 | 6.54 | 6.64 | 6.74 | 6.84 | 6.85 | 6.85 |
| Co-operative Bank [*FHB special] | 6.39 | 6.29* | 6.39 | 6.59 | 6.69 | 6.79 | 6.79 |
| Heartland Bank | 5.89 | 5.99 | 6.05 | 5.95 | |||
| HSBC | 6.44 | 6.44 | 6.59 | 6.69 | 6.79 | 7.29 | 7.39 |
| ICBC | 6.29 | 6.25 | 6.35 | 6.45 | 6.65 | 6.85 | 6.85 |
 |
6.39 | 6.39 | 6.49 | 6.54 | 6.59 | 6.65 | 6.69 |
 |
6.29 | 6.29 | 6.39 | 6.49 | 6.65 | 6.75 | 6.79 |
Fixed mortgage rates
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Comprehensive Home Loan Calculator
21 Comments
Sorry Yvil I get curve inversion but what needs to be taken into account is wholesale rates across all points of the curve have fallen since end of December. Banks are raising short term rates simply because they have larger pockets of fixed term mortgages coming up for renewal and with all the talk of rates having to fall and the end of this year, and interest rate markets in the wholesale market reflecting this, customers are likely to fix short rather than long and so banks are just wanting to profit more from those shorter term fixed rollovers. That is the economic reality and reflection of banks not being fair and transparent. Hope that the Conduction of Financial Institutions framework has more than baby teeth in the application.
and just to add facts to the Westpac decision - they last changed their 1,3,5 fixed rate mortgages on 30 Nov 2022. At that time the Interest Rate Swap rates were 5.27%, 4,85% and 4.51% respectively for 1,3,5 years.
Yesterday those rates were 5.26% (DOWN 0.01%), 4.47% (DOWN 0.38% - Westpac did not shift their 3 year rate) and 4.21% (DOWN 0.30% move matched by Westpac but not many people will go for such a term - just look at RBNZ data) - maybe Westpac meant to lower the 1 year rate but got the sign wrong when typing it in and the decimal point - neither critical things in banking eh?
Yes, agreed. This shows that what they are actually doing right now is contradicting with what they are saying / forecasting about RBNZ's next coming OCR decision. Lots of news reported ASB bank's rate changes titled in ASB dropped 5-year rate giving people kind of delusion that rates are coming down, but it's actually not. It's more like they are matching the short-term rates with long-term rates. And ANZ's changed their call on next OCR decision to 50bps, to me, it's not that they really believe that would happen but it's more like they are creating a narrative with other banks try to bring some influence on RBNZ's next OCR decision.
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