The next bank to move fixed home loan rates up, is Westpac.
This reverses its -10 bps cut to its two year fixed rate on August 14, now raising that same rate by +20 bps to 6.89%.
Also changed is a +26 bps rise to its five year fixed rate. This is notable because the previous five year rate was one of only two in the market below 6%. (Now only SBS Bank's three year rate is below 6%.)
Westpac's rate rises are actually relatively modest. They haven't raised them to more than just matching their main rivals. ASB opened the door and now both ANZ and Westpac have taken the invitation to raise rates.
At the same time, Westpac has raised some term deposit rates. The most notable one here is the +60 bps jump in their two year rate offer, to 6.00%. They join main-bank rival ANZ with a 6% rate although ANZ's is for an 18 month term.
BNZ and Kiwibank are the remaining two majors yet to announce recent changes.
Banks will [rightly] point out that wholesale swap rates have been rising globally. However, on Thursday we saw quite a sharp reversal back down in benchmark wholesale rates. It is just one day however, and the overall pressure is for higher benchmark rates.
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 own product.
One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is 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 August 25, 2023 | % | % | % | % | % | % | % |
| ANZ | 7.09 | 7.25 | 7.04 | 6.99 | 6.69 | 7.09 | 7.09 |
 |
7.45 | 7.25 | 6.95 | 6.89 | 6.69 | 6.59 | 6.49 |
 |
7.39 | 7.19 | 6.95 | 6.79 | 6.49 | 6.49 | 6.49 |
 |
7.15 | 6.99 | 6.79 | 6.49 | 6.29 | 6.29 | |
 |
7.19 | 7.25 +0.06 |
6.95 | 6.89 +0.20 |
6.69 +0.20 |
6.49 +0.20 |
6.25 +0.26 |
| Bank of China | 6.89 | 6.79 | 6.59 | 6.29 | 6.19 | 6.09 | |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.45 | 6.40 | 6.40 |
| Co-operative Bank [*FHB special] | 6.99 | 6.79* | 6.89 | 6.75 | 6.49 | 6.49 | 6.49 |
| Heartland Bank | 6.59 | 6.59 | 6.45 | 6.15 | |||
| HSBC | 7.19 | ||||||
| ICBC | 6.95 | 6.79 | 6.65 | 6.45 | 6.29 | 6.29 | 6.19 |
 |
7.19 | 7.19 | 6.95 | 6.74 | 5.99 | 6.59 | 6.69 |
 |
6.99 | 7.19 | 6.99 | 6.79 | 6.49 | 6.49 | 6.49 |
Fixed mortgage rates
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51 Comments
Now people will ask for pay rises in the workplace to pay for the higher mortgage/rent costs, and in order to stop businesses from going to negative cash flows, the price of goods and services will rise to pay for the high wage business expense. Higher prices for goods/services will feed into the CPI and be noted as higher inflation by the RBNZ, which means interest rates will go up again...
Even Westpac won't pay their staff more despite sky high profits...https://i.stuff.co.nz/business/300943387/westpac-workers-to-go-on-natio…
That is the difficulty we face - either prices keep going up, or people lose jobs (and default on rents and mortgages).
What is going to be worse? Is persistently high inflation (and employment) going to be better than people losing jobs and defaulting on mortgages?
Or…how about pay rise requests will be denied, as business revenue slumps due to diminishing disposable income levels. Higher and higher portions of income will be eaten up by mortgage payments/rents, spending will continue retracting, business profits plunge, unemployment will rise, and eventually rates need to be cut back to stimulate growth again. But hey, we’re all just guessing. ;)
This looking at just a small part of the "first order effects" of an OCR increase and calling it inflationary is just cope. The only bargaining power employees have is new willingness to work harder because they need to cover increased costs. When they work harder their productivity is also improved to an extent which offsets this inflation. Like how landlords struggle to increase rents to cover new costs, the employer does not magically find money just because some of their employees demand it a little stronger than last year.
You could could also consider other parts of the picture such as if rates were lower or left where they were. Where, people are able to inject lower multiples of their income into the economy every time they take out a mortgage.
Lol. I have no reason to make this up. At the time, the best I could get via the BNZ app (DIY) was 5.75%, so I asked my manager for their best 1y rate and she manually set it up for me. If interest was paid out monthly, the best she could do was 6.05%.
Can't attach screenshots here, but here's the details copied straight from the BNZ app...
BALANCE 100,000.00
Start date 4 May 2023
Term 365 days at 6.20% p.a.
Maturity date 3 May 2024
Interest paid At maturity to term deposit
Interest earned to date before tax deduction 1,919.45
Nice one KH! Yes, it seems to be the way they work. Kind of wrong of them really. If you don't ask you don't get. I recall a while ago my bank manager told me if I ever want to setup any TD's to contact her and she'll be able to offer a better rate than what I could get via the BNZ app.
So we import those care workers from other countries with appalling human rights conditions. Will likely hear of more and more cases of abuse at the hands of these carers. We will at least hear it from the victims that aren't dribbling incoherently 100% of the time.
I am not surprised, I don't know how people can afford to have children without being in a couple and having good jobs. Plus it is a lot of work. An look at the way previous and current generations have treated the world. Decreasing human population over time is probably what is needed. But countries and economies need economic growth and that requires population growth.
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