The next sign the home loan market is about to make a u-turn on rates has now emerged.
Westpac has cut all its two year and longer fixed rates, although it has also raised shorter rates slightly.
The moves aren't large but they are unmistakable. And they follow the recent reductions in wholesale rate indicators.
Westpac's carded two year rate has been reduced by -10 bps to 6.99%. This is the leading level for a main bank.
In fact for all terms two years and longer Westpac now has the lowest rates of any main bank. However many challenger banks have lower rates still.
Westpac specifically noted the falling cost of wholesale funding when they announced these changes. Interestingly, this comes as wholesale swap rates moved up noticeably Thursday, although after a longish retreat.
At the same time, the Red Bank has extended its 6.10% eighteen month term deposit offer to a 12 month term. That comes just before BNZ is about to end its outsized 6.25% one year TD offer at the end of the week. Westpac didn't make any other TD change Thursday.
These changes come just four weeks after the bank raised home loan rates. In between, the level of rate changes from banks in the home loan sector has been low.
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 November 24, 2023 | % | % | % | % | % | % | % |
| ANZ | 7.35 | 7.39 | 7.15 | 7.09 | 6.89 | 7.34 | 7.34 |
 |
7.45 | 7.45 | 7.15 | 7.05 | 6.85 | 6.75 | 6.69 |
 |
7.39 | 7.35 | 7.15 | 7.05 | 6.85 | 6.75 | 6.75 |
 |
7.39 | 7.35 | 7.05 | 6.89 | 6.79 | 6.79 | |
 |
7.39 +0.10 |
7.39 +0.04 |
7.19 +0.04 |
6.99 -0.10 |
6.75 -0.10 |
6.69 -0.06 |
6.49 -0.16 |
| Bank of China | 7.09 | 6.99 | 6.89 | 6.79 | 6.69 | 6.59 | |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.30 | 7.30 | 7.15 | 7.05 | 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 |
 |
7.55 | 7.55 | 7.25 | 7.15 | 6.79 | 6.79 | 6.79 |
 |
7.39 | 7.39 | 7.19 | 7.09 | 6.85 | 6.79 | 6.79 |
Fixed mortgage rates
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Daily swap rates
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Comprehensive Home Loan Calculator
27 Comments
The writing is on the wall.
For rates to still be 6.85% in two years means the RBNZ no longer has tools that work. For rates to be at 6.99% in even one year, after two years of rate tightening, means the the RBNZ no longer has tools that work.
Even with banks "rocket and feather" pricing, where banks raise very quickly but are slow to bring them down, the chances of 6.99% being on offer after another year is near zero.
Don't get suckered into fixing long. Six months, or one year max.
And for your wallet's sake ... Get quotes, shop around, negotiate, and change banks even for a tiny bit of difference.
If ONE bank, lowering ONE mortgage product is now called a TREND then I have just been re-educated
Sorry Iceman but the decade of ultra low interest rates is over, this pain won't pass while inflation is embedded and sticky
When/If they do reduce it's unlikely it will be anything meaningful to those with the wrong DTI gearing - Is a 100bps reduction going to make you cashflow positive?
Do any of you property bulls realise what would happen to the economy right now, if interest rates were to decline ?
There would be a "sale" worldwide on the NZD and its govt and commercial bonds - the NZD would decrease in value, bonds would be sold (before the holder lost any more money) and the exchange rate would drop .....imports would cost far more and exporters may get more in NZD - but say in the case of say farmers, their imported goods etc would be even more expensive.
This is what happens when property investors try to run the economy with a non-productive asset, by "monetising" property - no wonder they say NZ's economy is based around property, with a few bits tacked on.
Anyway, for countries that do have some good export earnings and are wealthier that NZ, they are going to end up like Zurich, Switzerland - with over 70% of people renting (with nearly all resigned they will be renting for life) while the remainder have an average house price CHF 1,600,000. or NZD 3 million ! so work out how you could afford a house there - unless you already have one or you or your family are loaded !
As far as NZ and what the residential property market is going to do now, I haven't got a clue - but the only way out of this (as I have said for a decade) is channel this money into PRODUCTIVE activities - R&D, innovations, higher skilled workforce etc. And the classic for NZ - stop exporting just the raw product and develop it in some way before export ie logs.
The whole aim of Central banks in the western world now is to SUCK AS MUCH MONEY OUT OF YOUR POCKET, AS THEY CAN ....SO THEY CAN HAVE EVEN MORE CONTROL OF WHAT MONEY YOU HAVE LEFT !
Completely agree. And as per the story yesterday, banks are pushing customers to fixed rates by setting the floating rate high.
Over the long term the floating rate should be the most efficient because it removes the term risk. But not in New Zealand apparently...
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