In a pre-Christmas move, our largest bank trims some key mortgage rates, and some not-so-key term deposit offers. Given where wholesale rates have been trending, this may be the start of a move down across the board

New Zealand's largest home loan lender, ANZ, has announced fixed rate reductions for both home loans - and some term deposit rates.

The home loan reductions are for the popular two and three year fixed rates, but don't include the even more popular one and 18 month rates.

The term deposit changes are reductions in the-less-than-popular two, four and five year rates.

ANZ says it has "made changes to some of our fixed home loan and term deposit rates to reflect the recent decrease in wholesale swap rates".

And yes, wholesales swap rates have reduced on global trends, although this week they have turned up very slightly after a long decline.

After peaking in early October at 5.96%, the one year swap rate has fallen to Tuesday's 5.38%. That is a 58 basis points retreat. The two year swap rate has fallen almost twice that, by 95 basis points.

To be fair, banks did raise them on October 24, which responded to the early October peak. Prior to that, ANZ raised them early July, and then ASB made a public showing of "restoring margins" after their Aussie boss complained about not being able to make any money at those levels.

So from early July, the net change is little different even though that was another peak and rate changes in between haven't really reflected the 'down' periods in place over much of the intervening period. Eyeballing the swap rate chart below reveals those longer lower periods.

However, banks have also been under pressure to pay savers more and they have responded with attractive six, nine and 12 month rates. Savers looking at the swap rate charts might be sweating an onset of lower deposit rate offers. But from ANZ that isn't happening yet. To its credit ANZ is holding those popular TD terms unchanged - even if its offers are 'mid-pack good' but aren't market leading. (And as the ANZ Australian boss explained to analysts, in New Zealand they have a dominant position and don't have to offer the best).

Obviously you should negotiate and shop around. Most banks will discount their carded home loan 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.

They may even offer savers higher than carded rate offers.

Challenger banks usually offer better rates - although not always mainly because most lack ready access to wholesale markets.

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. They will become important in a falling market however.

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 December 20, 2023	%	%	%	%	%	%	%
ANZ	7.35	7.39	7.15	6.89 -0.20	6.75 -0.14	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	7.39	7.19	6.99	6.75	6.69	6.49
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