Westpac changes rates again, cutting longer mortgage rates, raising shorter ones

Personal Finance / analysis

Westpac adds to the sense the home loan market may be about to u-turn and start offering lower fixed rates

23rd Nov 23, 5:15pm by David Chaston

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

Select chart tabs

Source: interest.co.nz

Source:

Daily swap rates

Select chart tabs

Source: NZFMA

Comprehensive Mortgage Calculator

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

27 Comments

by ryanjames | 23rd Nov 23, 5:26pm 1700713575

So it begins. LMF ⬇️

by Dgm | 23rd Nov 23, 6:21pm 1700716919

Rates still being raised.. JH

by Pragmatist | 23rd Nov 23, 8:27pm 1700724467

Lol, not just a river in Egypt hey.

by Frank Sobotka | 23rd Nov 23, 9:51pm 1700729468

10% this year according to the scrolls

by Yvil | 24th Nov 23, 9:15am 1700770520

Guaranteed. 🤡

by RealAgent | 23rd Nov 23, 6:26pm 1700717196

"Clearly, you are short of actual newsworthy stories."

by Yvil | 24th Nov 23, 9:26am 1700771208

The name of this site is "Interest" and they report on interest rates, and that surprises you?!

by GetFeeling | 23rd Nov 23, 6:27pm 1700717276

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.

by HouseMouse | 24th Nov 23, 8:10am 1700766626

Agree. We need to re-mortgage in July, I expect mortgage rates to be only marginally down from current levels. At this stage thinking we will fix for 6 months or a year. By mid 2025 I think short term mortgage rates are likely to be mid to high 5’s

by Iceman | 23rd Nov 23, 7:17pm 1700720261

Calling out all the DGM muppets again who guaranteed 10% by Christmas and HFL. They ridiculed anyone else who said otherwise, what will they say now?

by IT GUY | 23rd Nov 23, 7:24pm 1700720684

You gave credit to anyone who predicted 10%, more fool you, melting in the sun, Iceman.

by Iceman | 23rd Nov 23, 9:07pm 1700726854

Are you okay?

by DDDDebt | 23rd Nov 23, 9:38pm 1700728690

I think he's fine - he's just ridiculing the muppet who is celebrating a 10bps reduction

by Iceman | 24th Nov 23, 10:21am 1700774465

When convenient, you smart lot will focus on the trend, when the trend is going your way that is, That trend is potentially now changing. So be quiet now and educate yourself.

by DDDDebt | 24th Nov 23, 11:43am 1700779400

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?

by TronMVP | 23rd Nov 23, 9:18pm 1700727480

"What will they say now?"

The silence is deafening.

by Iceman | 24th Nov 23, 10:22am 1700774566

Keyboard warriors mate with not much in their brain.

by Crazy Horse | 24th Nov 23, 5:26pm 1700799976

Read my post below Iceman ,,,perhaps you might reconsider your "keyboard warriors" statement ...... ?

Or do you even understand what I wrote ?

by Crazy Horse | 24th Nov 23, 4:21pm 1700796076

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 !

by Pragmatist | 23rd Nov 23, 8:08pm 1700723327

I can see those 10% rates... In the rear view mirror, getting further and further away.

by rolande | 24th Nov 23, 6:38am 1700761094

Objects in mirror are closer than they appear

by Iceman | 24th Nov 23, 10:24am 1700774654

LOL. Desperate much!

by Pragmatist | 24th Nov 23, 10:36am 1700775375

I don't live in reverse gear, so if they are in the rear view mirror they are getting further away.

by HughJorgan | 23rd Nov 23, 8:11pm 1700723485

They are trying to push their customers to the outer part of the curve and then benefit from the swap rate decline when it happens.

by TronMVP | 23rd Nov 23, 9:09pm 1700726951

A reduction of 0.06%, they have to be mocking us!

by WildOscar | 24th Nov 23, 8:48am 1700768939

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...

by DollarsandSense | 24th Nov 23, 6:47am 1700761638

TOKENISM - if ever there was an example of this word then this action by Westpac is it. No change to standard rates and increases in some terms. FYI ALL relevant interest rate swap rates 1-5 years have fallen, and by some margin, so this move is laughable.