ANZ and Westpac follow ASB, raising fixed rates

Personal Finance / analysis

Three of the five main banks have now pushed through higher home loan rates. Two of them have also raised some longer term deposit rates. In the background, some wholesale swap rates pushed on up to 15 year highs

6th Jul 23, 5:53pm by David Chaston

Now both ANZ and Westpac have joined ASB in pushing up some key fixed home loan rates. Except, ANZ actually reduced its standard 4 and 5 year rates to be more competitive.

And like ASB, ANZ has raised their term deposit offers at the same time, especially for terms over 1 year. But Westpac has not - yet.

On the mortgage front, ANZ has chosen carded levels lower than ASB for its 1 year rate. Westpac chose carded levels lower than ASB for its 18 month rate.

For their two and three year rates, the three banks are now aligned with the same offer rates.

So for a short while at least, both BNZ and Kiwibank will be offering lower rates among the main banks.

Wholesale rates have been moving up as the swap rate charts below show. In fact today (Thursday), the key two year swap rate hit its highest level since November 2008.

Given what has been going on in international bond markets, it is hard to see the end of the current pressure from wholesale rates. Those who have guessed rates would be dropping by now have not guessed well.

Obviously you should negotiate and shop around. Most banks will discount their carded rates if you have strong financials. You shouldn't need them but if you are uncomfortable negotiating, a broker can often be helpful. But be aware some brokers won't offer you the best over the whole market, only the banks they have approved connections to in their "lending panel." And clearly bank mobile managers are there to pitch their company's ownn product.

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 July 7, 2023	%	%	%	%	%	%	%

ANZ	7.19 +0.20	7.19 +0.20	6.89 +0.14	6.79 +0.30	6.49 +0.20	6.89 -0.30	6.89 -0.20
	7.25	7.25	6.95	6.79	6.49	6.39	6.29
	7.09	6.99	6.75	6.59	6.29	6.29	6.29
	7.15	6.89		6.59	6.29	6.15	6.29
	7.09	6.99	6.89 +0.14	6.79 +0.20	6.49 +0.20	6.29 +0.10	5.99

Bank of China		6.79	6.59	6.39	6.09	6.09	6.09
China Construction Bank	6.76	6.70	6.59	6.55	6.40	6.40	6.40
Co-operative Bank [*FHB special]	6.79	6.55*	6.59	6.45	6.29	6.29	6.29
Heartland Bank		6.40	6.45	6.20	5.95
HSBC	7.09
ICBC	6.75	6.59	6.49	6.29	6.09	6.09	6.09
	6.99	6.99	6.84	6.59	6.29	6.59	6.69
	6.99	6.99	6.75	6.49	6.39	6.29	6.29

Fixed mortgage rates

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Source: interest.co.nz

Source:

Daily swap rates

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Source: NZFMA

Comprehensive Mortgage Calculator

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48 Comments

by HouseMouse | 6th Jul 23, 6:00pm 1688623214

But……. All those economists were saying months ago interest rates wouldn’t go higher!

whoopsy

by Juzz | 6th Jul 23, 6:20pm 1688624419

Funny that, I would have thought they should have an ethical code of conduct. I have to, and also follow rules, regulations, codes of practice and standards. Are we saying their failures are not causing harm?

by Nzdan | 7th Jul 23, 8:00am 1688673628

Nah come on, only in mortgage lending is it 100% borrower beware.

You can be conned into buying the cheapest lowest quality fridge on the market, and despite knowing it's rubbish and won't last, the Consumer Guarantees Act has got your back.

The bank has no obligation whatsoever to use their wealth of lending experience and data to consult with their clients, making them aware of potential long term risks. Infact, the banks are deserving of sympathy for being conned by their sub-prime borrowers.

by sit23 | 9th Jul 23, 7:38pm 1688888294

Why would anyone be so far into cuckooland as to think that ethics and morals have anything whatsoever to do with the Aussie banks? They are all a bunch of dishonest, profiteering, cheap crooks on high wages with fat bonuses for the bosses. As the BNZ staffmember said to me when I shut my accounts with them to use only kiwi owned banks, " I don't know why anyone banks with us!".

by marewa | 6th Jul 23, 6:53pm 1688626435

If the floating rate is accelerating to 8 then they surely must be testing at 10.

I heard a rumour, nay, a prophecy, now gone like 1's and 0's in the wind.

by Justa comment | 6th Jul 23, 7:35pm 1688628930

Will BNZ stand by their own economist and not raise rates, I doubt it, they will ignore Topliss and raise.

by Norm | 6th Jul 23, 8:09pm 1688630947

HM, that's pretty hypocritical of you, you've had a few wrong calls.

by Justa comment | 6th Jul 23, 8:57pm 1688633844

Well if they believe him, dont raise.

by Albert2020 | 6th Jul 23, 9:15pm 1688634910

He’s not preaching for financial gain though is he. Tony, Squirrel and the Church are all heavily conflicted who are trying to spruik the market to line their pockets.

by Justa comment | 7th Jul 23, 11:24am 1688685864

True, but theres nothing wrong with calling these guys out when they called the top at 4 then 4.25 then 4.5 then 5.0 then 5.25. Many on this site believed they were wrong, and have been proven to be correct.

by starrider | 7th Jul 23, 9:12am 1688677943

Economists are paid very well - to get their predictions wrong again and again. HM is not an economist, neither am I.

Calling out "professionals" for doing an absolute ratsh1t attempt at their job is not hypocritical.

Your comment reminds me of all the pearl clutching that was going on during Covid. With loads of folks screaming down anyone who dared to question the govt or "experts" based on the data. And look where that got us.

by interesting1234 | 7th Jul 23, 12:54pm 1688691242

Keenly awaiting the inquiry by the Royal Commission into the COVID response. Wondering what will be the NZD impact if it actually brings out the backdoor conversations and rational behind decisions made instead of a lighthearted waffle that breezes over govt culpability that we all expect it to be.

by Zwifter | 7th Jul 23, 2:05pm 1688695524

Not sure anyone would expect it to be anything than a complete waste of time. It would change nothing if another Pandemic came along next year because we have changed nothing. Its not like we have built a dedicated quarantine facility that's now ready to go and frontline nurse and doctor numbers continue to decline instead of increase along with the hospitals in slow decay. If you need an inquiry to tell you the obvious, the labour government is even worse than I thought.

by sit23 | 9th Jul 23, 7:41pm 1688888467

The government does not pay Royal Commissions to give them the wrong answer. Again, this is so blindingly obvious that it worries me to think that there could possibly be someone out there who believes otherwise.

by GetFeeling | 7th Jul 23, 8:55am 1688676938

They did. But you just didn't listen carefully enough.

The longer term swap rates 3, 7 and 10 year swap peaked back in Dec 22.

The shorter term rates are being manipulated by our banking oligarchy to ensure people re-fix as long as possible.

by MisterB | 7th Jul 23, 12:37pm 1688690261

Are you saying the banking oligarchy control the 1 to 2 year swap rates???

The retail rates should arguably be higher (on TD and HL) relative to 1-2 yrs swaps at the minute

by interesting1234 | 7th Jul 23, 12:55pm 1688691324

NZ is the country of oligarchies and duopolies who may as well be paying the comcom for their summer vacations

by Averageman | 6th Jul 23, 6:15pm 1688624112

Like Edmunds bread. Sure to rise. Next ocr review within two week....

by HouseMouse | 6th Jul 23, 6:20pm 1688624400

Test rates at 9%?

by Juzz | 6th Jul 23, 6:20pm 1688624457

At the very minimum

by HouseMouse | 6th Jul 23, 6:32pm 1688625140

At 9% that’s weekly repayments of $1300 on a 700k mortgage over 30 years…

by IT GUY | 6th Jul 23, 6:38pm 1688625533

Not many Bali Holidays for that family, which is very sad over 30 years..... you are working for da man....

by marewa | 6th Jul 23, 6:48pm 1688626100

Ultimately cheaper to default. If I owe the bank 1000 dollars, it's my problem..

by JimboJones | 6th Jul 23, 7:24pm 1688628280

At least inflation helps you get ahead these days. Not that long ago people were signing over their lives for 30 years with barely a pay rise to be foreseen.

by HouseMouse | 6th Jul 23, 7:45pm 1688629545

Hope that’s sarcastic?

by JimboJones | 6th Jul 23, 7:57pm 1688630258

Not at all. When we bought our house the repayments were about 50% of our income. 5 years later the same repayments were about 30% of our income. Inflation is very handy when you have debt.

by HouseMouse | 6th Jul 23, 8:10pm 1688631021

But your assumptions are based on periods of low inflation and lower interest rates.

Also presumably your increased income over 5 years was earlier career escalation.

by JimboJones | 6th Jul 23, 8:22pm 1688631773

It was mostly inflation which was running in the 4-5% range from memory. 5 years of 5% pay rises makes a big difference. Of course house prices were much lower and interest rates much higher.

The main issue at the moment is that interest rates have gone up so much. When we bought we fixed for 5 years so that didn’t matter, which is probably a sensible thing for any FHB to do.

But I’m not saying now is a good time to buy, house prices are still way too high compared to interest rates.

by HouseMouse | 6th Jul 23, 8:51pm 1688633503

So inflation isn’t so good is it? Salaries (for some) are rising significantly, but so is the cost of debt and wider cost of living.

And the wage-price spiral just perpetuates the inflation problem.

Of course for some (low or no mortgage debt, no dependents etc) with good pay rises, it’s probably quite a good time financially. Winners and losers etc etc. My son for example, has had two years of great pay rises. No dependents and his rent has hardly risen at all. Cycles to work and to shops etc so not impacted much by fuel price rises.

But plenty are getting slammed right now.

by Nzdan | 7th Jul 23, 8:02am 1688673728

Pay rises are good to inflate the debt away. If borrowers can survive the short term pain of high interest rates, then medium to long term the burden of debt is greatly reduced.

by sit23 | 9th Jul 23, 7:44pm 1688888670

With debt on property, the value of the building rises while the debt goes down or remains the same. Bring back inflation again, which has historically made a lot of people a lot of money.

by Norm | 6th Jul 23, 8:04pm 1688630646

They won't be fixing for 30 years though, probably 3 max, by then rates should reduce, you'd hope.

by powerupkiwi | 7th Jul 23, 12:42pm 1688690547

Better off working for the man from luxury accommodation in Bali

by JimboJones | 6th Jul 23, 7:05pm 1688627133

So on an average million dollar Auckland house it must be close to 2k a week you need to have spare to be allowed to buy. Yikes.

by jeremyr | 6th Jul 23, 6:39pm 1688625553

….and floating rates over 10% at main banks too soon. Just like that prophet guy keep saying. In fact he was proven correct a few weeks ago. One of the second tier lenders already has a floating rate at 10.49%. Ouch.

by malamah | 6th Jul 23, 7:20pm 1688628008

There's something out there that they've all seen. A sudden rise in rates, KB talking about coming out of recession before delving back later this year and next. Something has them on their toes.

by Justa comment | 6th Jul 23, 7:37pm 1688629041

Yes the swap markets started moving a couple of weeks ago, even at the long end.

by Rob Reid | 6th Jul 23, 7:44pm 1688629467

The Prophet spaketh unto them of omens ill, and verily they have girded their loins against the foul mood of the tempest upon us.

by IT GUY | 6th Jul 23, 6:53pm 1688626403

Marzipan man has eggs all over his face now, this is not going to be a soft landing, its going to be a crash landing....

by Albert2020 | 6th Jul 23, 7:12pm 1688627576

Speaking of brokers, I found out today that Tony A has his own brokerage firm in Wellington. Independent my derrière.

by JimboJones | 6th Jul 23, 7:21pm 1688628071

My derrière can be rather independent after a spicy curry.

by HouseMouse | 6th Jul 23, 8:11pm 1688631078

Interesting.

by Albert2020 | 6th Jul 23, 9:18pm 1688635138

Yeah was talking to my broker who told me about Tony’s not so public other business. Also was saying he’s got quite a few clients asking banks about going IO and mortgage holidays. Apparently banks are being more open to the idea (assuming you have equity) than they were after GFC.

by Hawkes Bay | 6th Jul 23, 8:21pm 1688631704

As The Prophet would always say.

What the Vested Interest Brigade say - Believe The Opposite !

by jt_nzl | 6th Jul 23, 7:39pm 1688629189

The contractionary momentum in the economy is clear, and I think the RBNZ will begin cutting by the Feb-24 meeting. It could even happen as early as November, once the election is in the rear view mirror, but I'm not sure the labour market will respond quickly enough to provide the hard data to prompt that move. An early cut is perhaps more likely to be initiated by some form of financial distress (aggressive growth in non-performing loans?), than a weighing of inflation against growth, but your guess if and when that happens is as good as mine.

by HouseMouse | 6th Jul 23, 8:14pm 1688631249

Maybe, but I am sticking with early/ mid 2024.

Inflation is still likely to be highish late ‘23, and I suspect unemployment is not really going to bite until 2024.

by OldSkoolEconomics | 6th Jul 23, 9:43pm 1688636629

Yeah. Christmas is going to be pretty dire for a lot of peeps this year.

by Belle | 7th Jul 23, 6:05pm 1688709944

They cant cut if no one else does. Our dollar would crater.