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BNZ responds to the end of year thin slice to some carded fixed home loan rates by ANZ, making some of its own. But BNZ did not trim its term deposit offers as ANZ did

Personal Finance / analysis
BNZ responds to the end of year thin slice to some carded fixed home loan rates by ANZ, making some of its own. But BNZ did not trim its term deposit offers as ANZ did
[updated]
21st Dec 23, 9:12am by David Chaston

Update: ASB has now followed with its own matching changes. They also trimmed term deposit rates.

BNZ has followed ANZ by trimming two popular fixed home loan rates.

But BNZ has not changed any term deposit rates as ANZ did

On the home loan front, like ANZ, BNZ left the popular 1 year offer unchanged at 7.35%. That means it still offers the lowest one year rate among the main banks, in conjunction with Kiwibank.

The lowest 1 year rate from any bank is the 6.99% from Heartland Bank, the only bank rate below 7% for that term.

Now BNZ's two year carded fixed rate matches ANZ's 6.89% level, the lowest of the main banks for that term.

The lowest 2 year rate from any bank is 6.75% from China Construction Bank.

BNZ's new three year rate of 6.79% isn't quite as low as ANZ's 6.75%, and both ANZ and Westpac have the lowest main bank three year rate offers.

The lowest 3 year rate from any bank is also from China Construction Bank at 6.49%.

BNZ not matching ANZ's cuts to longer term deposit rate (for 2 year, 4 years and 5 years) is perhaps understandable. Very few term deposit savings go into these durantions so rate changes there won't move any bank's dial. BNZ, like all other banks, maintains a healthy rate benefit over ANZ for savers

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 22, 2023 % % % % % % %
               
ANZ 7.35 7.39 7.15 6.89
-0.20		 6.75
-0.14		 7.34 7.34
ASB 7.45 7.45 7.15 6.89
-0.16		 6.75
-0.10		 6.75 6.69
7.39 7.35 7.15 6.89
-0.16		 6.79
-0.06		 6.75 6.75
Kiwibank 7.39 7.35   7.05 6.89 6.79 6.79
Westpac 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
  SBS Bank 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
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Daily swap rates

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Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA
Source: NZFMA

Comprehensive Mortgage Calculator

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22 Comments

by  Justa comment  |  21st Dec 23, 9:24am 1703103876

Still nothing near 6%..................

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by  TronMVP  |  21st Dec 23, 9:52am 1703105553

Be patient. It will be 6% in June.

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by  Piggy  |  21st Dec 23, 10:26am 1703107609

It’s also not 10% as was guaranteed 

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by  ChrisOfNoFame  |  21st Dec 23, 10:47am 1703108851

So fix for six months. By July? Who knows, but probably. Banks by then will be falling over themselves to capture (or pretend to) / retain market share.

The last thing banks want is people paying down debt. Far better to con the mortgagor into getting a 'sweet deal'.

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by  1689 Baptist  |  21st Dec 23, 11:27am 1703111228

I'm pretty sure there was no point in banning Hawkes Bay from this forum. He harped on about his scrolls and 10% guaranteed so many times for months that I am pretty sure he would have slinked away in shame.

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by  ChrisOfNoFame  |  21st Dec 23, 2:29pm 1703122178

(Is your comment in the wrong place?)

I didn't have a problem with it. It was ludicrously unreasoned and therefore worthy of chuckle before moving on.

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by  Zwifter  |  21st Dec 23, 11:49am 1703112567

Bit early for that, got 6.26% on a 12 month TD not even a month ago.

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by  ChrisOfNoFame  |  21st Dec 23, 2:33pm 1703122389

Wanna bet such deposit rates are long gone after Christmas?

Actually, with bank margins so fat at the moment they may hold them longer. Hmm. But not much longer.

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by  Trapezitoe  |  21st Dec 23, 10:34am 1703108071

"It will be".....strong prediction... that would mean a much lower OCR rate and I dont see that happening with the remit of unemployment  % as a consideration .   be careful  of relying on anonymous soothsayers.

protect what you can afford and work to your own risk factor comfortability

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by  Pragmatist  |  21st Dec 23, 11:22am 1703110976
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by  TronMVP  |  21st Dec 23, 4:20pm 1703128807

2 year rates are closely correlated to the 2 year swap rates, which are doing a bit of a dive right now. I've no idea when Adrian Orr will reduce the OCR because he indicates that he won't do it next year, even though he should be doing it in February/March. My guess is that he will relent in the middle of next year.

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by  Colin Cameron  |  22nd Dec 23, 12:31pm 1703201497

He may have to walk and get a new replacement which will then save face

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by  ChrisOfNoFame  |  21st Dec 23, 10:46am 1703108805

An unusually strongly worded article about where rates are going for the NZ Herald: https://www.nzherald.co.nz/business/will-nz-mortgage-interest-rates-hea…

e.g.

“The base case is that it might be the second half of January that you could see banks begin to start lowering mortgage rates if we don’t see wholesale rates push up again,” Hamish Pepper, fixed income and currency strategist at Harbour Asset Management, said.

and

"One mortgage broker said the bank’s published OCR track was “ridiculous”."

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by  ChrisOfNoFame  |  21st Dec 23, 11:01am 1703109691

UK inflation slowed sharply in November to 3.9 per cent ... was well below the 4.4 per cent year-on-year increase in consumer prices predicted by economists in a Reuters poll, as inflation was tugged lower by petrol, food and leisure.

Source: FT

TBH, I'm not surprised.

Like NZ Banks, UK banks have been pushing HFL b.s. quite hard.

Alas for the average Brit - they haven't yet figured out that bank economists publish 'infomercials' and these 'infomercials' should never be confused with serious economic analysis.

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by  ChrisOfNoFame  |  21st Dec 23, 11:05am 1703109922

Yes. I do expect the next CPI print to be below 'economists' predictions too.

(And please note: The CPI is the RBNZ's alone and not a true reflection of the cost of living as it excludes factors that the RBNZ isn't interested in. And our conniving new government shouldn't be pegging benefits to it either for exactly that reason.)

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by  longjohndrop  |  21st Dec 23, 11:03am 1703109825

Just Higher, some uneducated on here would say. Or you can join the club of;

Lower Much Faster 🍿🍿 it has begun. 

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by  1689 Baptist  |  21st Dec 23, 11:39am 1703111987

Just borrowed 100k today for a business venture. Been stewing on this for months but the movements in the last few weeks in swap rates and bank indications have given me confidence to take the plunge. I expect rates to change little in the next couple of years (<1%). But if they come down it will be a bonus.

 

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by  D-Back  |  21st Dec 23, 11:40am 1703112036

And did you fix or float? 

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by  1689 Baptist  |  21st Dec 23, 12:11pm 1703113884

Float

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by  Yvil  |  21st Dec 23, 1:57pm 1703120260

Good luck with your venture!

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by  Colin Cameron  |  22nd Dec 23, 12:33pm 1703201639

Congrats best of luck

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by  DollarsandSense  |  22nd Dec 23, 8:59am 1703188784

The perfect definition of tokenism displayed by the banks currently.  They don’t cut the 1 year rate.  Why? Because with all the talk of interest rates falling people who have to refix will go short term versus 2 or 3 years.  To add insult to injury the cuts are so small (in BNZ’s case 0.10% and 0.06%) from their previous rates when the interest rate swap market, in which the banks hedge interest rate risk, have dropped 0.75% since the beginning of October.  Ask yourself why and you can only come to one answer.  Profit.  They will tell you uncertainty, don’t want to put fuel on the housing market BBQ and upset the RBNZ blah blah blah…but the truth is if interest rate market had risen by the equivalent amount they would have been raising rates faster than a SpaceX rocket at maximum velocity.  Merry Christmas from me to the real Christmas Grinches.

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