ANZ raises mortgage rates. BNZ too

Personal Finance / analysis

ANZ raises home loan rates along with term deposit rates, finally catching up with ASB, but opening up same carded differences with other main rivals

[updated]

24th Oct 23, 5:53pm by David Chaston

ANZ raised carded home loan rates Tuesday. Update: BNZ did too on Wednesday.

"When reviewing interest rates we consider a range of factors, including the impact on customers, the underlying cost of funds (including wholesale rate movements) and competitor activity," ANZ says.

After these changes, ANZ has moved up broadly in line with ASB's changes made on September 4.

BNZ and Kiwibank are now the only two main banks with carded fixed rates below 7% for 2 years of less. BNZ is the main bank with the lowest one year carded rate at 7.09% which is -30 basis points (bps) lower than the new ANZ rate, -36 bps lower than ASB. (Note, BNZ unveiled one to five year increases early Wednesday, details here).

ANZ's latest home loan rate increases came with rises for term deposit savers which ranged between +10 bps and +30 bps in this round.

Since early September (when ASB raised mortgage rates aggressively), wholesale money rates rose - and then they fell more recently. The one year swap rate is now only +5 bps higher than on September 4. The two year swap rate is only a new +10 bps higher. Swap rates actually fell quite sharply Tuesday, in line with the pull-back in benchmark bond yields.

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 October 25, 2023	%	%	%	%	%	%	%

ANZ	7.35 +0.26	7.39 +0.14	7.15 +0.11	7.09 +0.10	6.89 +0.20	7.34 +0.25	7.34 +0.25
	7.45	7.45	7.15	7.05	6.85	6.75	6.69
	7.39	7.25 +0.06	7.09	6.99	6.85 +0.16	6.75 +0.06	6.75 +0.06
	7.25	7.25		7.05	6.89	6.79	6.79
	7.19	7.25	7.09	6.99	6.69	6.59	6.39

Bank of China		6.99	6.99	6.89	6.69	6.49	6.39
China Construction Bank	7.19	7.09	6.89	6.75	6.49	6.40	6.40
Co-operative Bank	7.15	7.15	7.05	6.99	6.85	6.85	6.85
Heartland Bank		6.99	6.89	6.85	6.65
ICBC	7.19	7.05	6.95	6.85	6.59	6.49	6.49
	7.45	7.55	7.15	7.05	6.69	6.69	6.69
	7.19	7.19	7.19	6.99	6.85	6.75	6.69

Fixed mortgage rates

Select chart tabs

Source: interest.co.nz

Source:

Daily swap rates

Select chart tabs

Source: NZFMA

Comprehensive Mortgage Calculator

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59 Comments

by Pragmatist | 24th Oct 23, 6:05pm 1698123956

BNZ and Kiwibank are now the only two main banks with carded fixed rates below 7%. BNZ is the main bank with the lowest one year carded rate at 7.09% which is -30 bps lower than the new ANZ rate, -36 bps lower than ASB.

You need to qualify that statement further, the entire 3yr column is under 7% in your table.

by J.C. | 24th Oct 23, 6:33pm 1698125621

Over the ditch this week, CBA extended its home loan book to include investors with a 5% deposit, provided these borrowers commit to paying P&I.

The lowest advertised rate for an investor with a 5% deposit from CBA is 7.59%.

by Frank Sobotka | 24th Oct 23, 6:36pm 1698125798

The Scrolls were right! I knew it

by Dgm | 24th Oct 23, 7:19pm 1698128359

The prophet needs to update their forecast.. 8 % is well outdated...

by Retired-Poppy | 24th Oct 23, 7:30pm 1698129022

The Prophet was ridiculed in the early 70s too.

by Frank Sobotka | 24th Oct 23, 8:23pm 1698132197

Give him some time, he reckoned by the end of the year and we aren’t there just yet

by Slapheid | 24th Oct 23, 6:50pm 1698126606

This must be the much-heralded top of the interest rate curve ! 👍

by Retired-Poppy | 24th Oct 23, 7:39pm 1698129571

The interest rate curve has had as many tops as real estate has had bottoms. From an investment perspective the latter looks about as attractive as an aging Plastic Surgery addict.

by Dgm | 24th Oct 23, 7:06pm 1698127590

JH.. yeah.. it's going to start hurting..

by Jean Valjean | 24th Oct 23, 7:09pm 1698127765

Are those ANZ 4 and 5 year rates correct (7.34%)? They're significantly higher than the competitors.

by Dgm | 24th Oct 23, 7:17pm 1698128262

This will look cheap in a couple of months.. JH will ensure that outcome...

by Jean Valjean | 24th Oct 23, 7:21pm 1698128515

Maybe!

What's JH?

by Yvil | 24th Oct 23, 7:55pm 1698130502

Do you mean HJ? Half Joking?

by Dgm | 24th Oct 23, 8:08pm 1698131303

Your immaturity at play..

Even don brash hasn't improved your intellectuality

by Retired-Poppy | 24th Oct 23, 8:09pm 1698131342

It's no longer High for Longer (HFL), it's Just Higher.

It's suggestive of a new long term normal. "Apparently" according to the vested, borrowers are now getting used to it. I guess this would then imply there is less cause for rates to come down anytime soon??????

As you know it's more about higher and rising global wholesale rates at play than anything else.

by Jean Valjean | 24th Oct 23, 8:04pm 1698131090

Thanks. The acronyms are changing fast too!

by Yvil | 24th Oct 23, 8:20pm 1698132041

You're welcome Jean.

by Dgm | 24th Oct 23, 8:09pm 1698131399

Thanks RP.. perfectly elaborated..

by sharetrader | 24th Oct 23, 9:17pm 1698135467

i would suggest rather than higher we are heading back to the normal range of interest rates, and i doubt we will see sub 4% again unless we have another worldwide crisis

by Yvil | 25th Oct 23, 7:30am 1698172217

Worldwide crisis coming in 2024, guaranteed ! 😅 I admit I (probably wrongly) predicted it would be here by end of 2023)

by M0ralHazard | 25th Oct 23, 8:18am 1698175113

"borrowers are now getting used to it"

This time 2 years ago the average 2 year fixed mortgage was ~3.5% according to the graph above. Borrowers have still got quite a bit of pain coming.

by Justa comment | 24th Oct 23, 7:21pm 1698128492

Yes just looking at those rates shows there is a lot of uncertainty at the long end. They are trying to guide and pair their book on the 3 yr. ANZ has finally moved their long end TDs to 5 yr 5.45%, maybe starting to want TDs again after 2 years of very little interest in being competitive for funds. Interesting to see the SBS 1 yr TD hit 6.7% today.

by Pragmatist | 24th Oct 23, 8:30pm 1698132608

Anz don't advertise a 'special' 4 &. 5 Yr rate. In practice they'll be about the same as the other big banks

by K.W. | 25th Oct 23, 12:01pm 1698188497

Are those ANZ 4 and 5 year rates correct (7.34%)? They're significantly higher than the competitors.

Not for long. Its called signalling.

by sharetrader | 24th Oct 23, 7:42pm 1698129770

maybe people need to chill, what happened after 2008 was unusual and the normal range of interest rates for NZ is much higher than we have had for the last ten years.

plenty of us still remember double digit home loan rates

Interest rates, 1966–2008 – Prices and inflation – Te Ara Encyclopedia of New Zealand

by HouseMouse | 24th Oct 23, 7:51pm 1698130314

Yes, but on much lower debt relative to incomes…

by hootenany | 30th Oct 23, 9:23am 1698610993

Yes but I think that's because low interest rates. I think people borrow as much as they can afford to repay so when interest rates are low they borrow more. If you believe house prices will go up the price of the house is irrelevant what it costs, its going to cost more later, as long as you can meet the repayments enough people will buy.

I see only 2 ways to get house prices to be affordable, increase interest rates or make people believe that house prices will fall, and I don't think the real estate sector or politicians in let that happen.

by Retired-Poppy | 24th Oct 23, 7:55pm 1698130526

Events out of left field can drastically alter inflation, interest rates in either direction.

Oil, war, food shortages, climate change = up, equity crash = down. History serves as a valuable guide as to how the former events can eventually lead to the latter....

The key common denominator here is greed.

by timbob | 24th Oct 23, 7:56pm 1698130616

Its the same across the world, rates are not just higher for longer, but the fed is now saying the the neutral cash rate could be higher than we thought, as inflation, GDP and employment remain strong despite higher interest rates. Sound familiar? The same could be said for NZ.

https://www.bloomberg.com/news/articles/2023-10-10/fed-s-daly-says-she-…

by Frank Sobotka | 24th Oct 23, 8:26pm 1698132393

But Tony Alexander says we’ve hit the peak of the rates?

by Dgm | 24th Oct 23, 8:32pm 1698132778

Might explain why he was kicked out of BNZ

by HouseMouse | 24th Oct 23, 8:50pm 1698133847

Nah, I suspect he was given the boot because of his nasty, condescending comments about FHBs. Lots of people, including me, complained.

It was nasty and immature, and coming from someone in a very senior and high profile position, reflected very badly on the bank.

by TronMVP | 24th Oct 23, 9:57pm 1698137831

What was he saying about first-time buyers?

by HouseMouse | 24th Oct 23, 10:05pm 1698138331

Lots of snide mocking about eating too much avocado on toast etc etc

by sit23 | 25th Oct 23, 9:00am 1698177648

Potential FHBs have never eaten smashed avo etc. They are too busy saving. It is the entitled Gen X, I think, who eat that, and have earbuds, and I phone14s, and the latest sports shoes, and trendy tats, and inappropriate yoga pants, and beards with short back and sides, cut every 2 or 3 weeks, apparently . And wildly coloured hair. And inappropriate dogs in their rental places. I think that covers it. Put some more in if I have missed some.

by AN Other | 25th Oct 23, 11:53am 1698188032

Gen Y (or Millenials as they like to label themselves) not Gen X.

Gen X is saving for retirement and looking after elderly parents while not drawing attention to themselves.

by NZGecko | 24th Oct 23, 9:47pm 1698137255

He has been promoting his "they peaked now" expert views since June 2022.......how the hell does he still get airtime with being so terribly and consistently incorrect?

Telling FHBs to leap in now!! - before the fomo comes back! His job is really to feed the novice griss into the mill.

What a tool.

by Jesse1 | 25th Oct 23, 7:10am 1698171002

I'm disappointed with Stuff that they are now letting him spread his BS there too:

https://www.stuff.co.nz/business/property/300994894/heres-where-you-mig…

by Dgm | 25th Oct 23, 7:13am 1698171213

The spruikers treat him like God.. they blurt out everything he states

by kiwimm | 25th Oct 23, 9:43am 1698180207

Even objectively, you can see his bias as all of his predictions are wrong in the same direction i.e. he says rates are always going down and house prices are always going to go up. A monkey with a dartboard would predict better, being wrong only 50% of the time.

by fortunr | 25th Oct 23, 11:52am 1698187925

LOL, Metservice is much more reliable than him...

by beau | 25th Oct 23, 1:14pm 1698192842

Reputation is everything. R.I.P TA

by JimboJones | 24th Oct 23, 10:00pm 1698138017

The US economy is very strong right now, I’m not so sure ours is. There is no reason for us to have higher interest rates than them if we don’t have the same hot economy. Will be interesting how it all pans out.

by Tallmantim | 25th Oct 23, 2:55am 1698155707

Too support the NZD to try and keep import prices lower due to inflation being above their 2 or 3 whatever % figure would be my guess as having something to do with it.

by Dgm | 25th Oct 23, 7:16am 1698171384

Remember Argentina? We need international money, so we'll have to compete.. unless the rbnz intervenes, but not when the word inflation is still floating around globally

by Zwifter | 25th Oct 23, 11:35am 1698186930

The USA economy is not strong, never has been since 2008. I'm just waiting for it to all fall over and 5th November 2024 looks like the date to kick it all off with a bang.

by Yvil | 25th Oct 23, 12:05pm 1698188734

Hi timbob, thanks for the link, it's a great video from Daly! I'm not sure you watched though ? Or perhaps you didn't fully understand it? Daly clearly says that, whilst the neutral interest rate will remain above the pre-covid level, it will not be as high as today's 5% (in the USA). She even puts a figure (brave call) of around 3% .

by Nzdan | 25th Oct 23, 7:27am 1698172049

Mind you the pain of double digit rates were easily mitigated if people just used those double digit term deposit rates to accumulate a bigger deposit. But instead people were in too much of a rush, insisting on taking out 2 mortgages and often vendors finance to make it all work.

by sharetrader | 25th Oct 23, 8:23am 1698175390

and back in those days you did not pay tax on your savings so with compounding it grew quite quickly, that and it was HARD to get a mortgage from a bank, which all lead to house prices growing very slowly, it all changed in the late 80's when it suddenly was easier to get debt and it became a housing market

by refactornz | 24th Oct 23, 10:14pm 1698138876

Static OCR and 1 year swap rates lower than they were 5 months ago yet ANZ increase 1 year 14 bps and 6 months up 26 bps. Never a clearer case of price gouging.

by Dgm | 25th Oct 23, 7:17am 1698171469

Most banks borrow on the 10y...

by refactornz | 25th Oct 23, 8:01am 1698174100

for their long terms

by DonKerrBab | 25th Oct 23, 8:37am 1698176224

As a rule for the last few decades fixed rate mortgages would be roughly 2% over the swap rate. Appeared to me that the last 18 months it got as tight us just under 1% I’d expect this was because almost no business was written and banks were actively competing for the little business available assuming those who could transact would have been at the better end of the credit spectrum. So it looks to me like banks are now becoming quite confident that house prices and activity have reached the nadir and they are now trying to recoup their margin back to the historical norm. Probably indicates more than anything banks are quite confident about the housing environment now.

by fortunr | 25th Oct 23, 11:56am 1698188198

Good points. Even if Orr does not raise the OCR next month (as he should do) deposit and mortgage rates still have quite a bit higher to go.

And if the housing market really does bounce back a bit, and the new Government removes (as promised) the employment cause from the RBNZ's remit, then all bets are off.

by ChrisOfNoFame | 25th Oct 23, 11:19am 1698185987

If you're looking at the right indicators, there are clear early signals that HFL is nonsense. Another few months of similar activity and these indicators will be crystal clear.

by tuisbest | 25th Oct 23, 12:39pm 1698190763

Would you mind explaining what indicators you're referring to, Chris? I'd like to make sure I'm monitoring those.

by Averageman | 25th Oct 23, 12:05pm 1698188708

Only for those exposed on 2%, or expecting a price based on 2% leverage. Otherwise its just a number.

by JustAnOpinion | 25th Oct 23, 11:33am 1698186828

This certainly will be making people like me very squeaky.

I am sure the 371 people per day that are net-migrating to NZ and the re-introduction of interest deductability will have no impact on house or rent pricing.

by K.W. | 25th Oct 23, 12:11pm 1698189111

Net inflow of 47,794 people into NZ in October so far, and still 9 days to go. Annualise that! Hugely inflationary, and not just for rents.