BNZ lowers all fixed home loan rates

Personal Finance / analysis

Another major bank tweaks its mortgage rate card lower as doubts spread about an OCR hike next week. Competition is rising as the real estate market hasn't really fired yet in its crucial selling season

22nd Feb 24, 8:06am by David Chaston

Despite the economists at rivals ANZ saying they think the RBNZ will raise the OCR at its review next week, BNZ has pushed through a comprehensive set of fixed home loan reductions today (Thursday).

BNZ's economists don't think there will be an increase. Wholesale market pricing is on the fence, although it sees little chance of a change at next week's OCR review. They are 50/50 by May however - of one +25 bps rise. Market pricing moves around a lot as indications change and it isn't a fixed signal on the future.

BNZ's rate changes range from just -4 bps for the two year fixed rate, to -20 bps for their four and five year fixed rates.

Although the changes are minor in the popular terms, it does position them with one of the lowest rate cards of any main bank.

Carded rates are one thing, but what you will be offered after negotiation is another because loan officers will have some discretion to win new business or hold existing clients.

There was no matching cut to BNZ term deposit rates with today's change.

Wholesale swap rates ticked higher in early February and have stayed up, helped along by the market sentiment that responds largely to the global pressures at play for terms 2 years and longer.

But probably the bigger reason behind this rate cut is competitive forces - we are in the key real estate selling season and activity is stunted with lots of availability and weak sales levels for this part of the season. Mortgage managers will be scrambling for volumes to meet their lending targets.

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.

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 February 9, 2024	%	%	%	%	%	%	%

ANZ	7.35	7.39	7.15	6.89	6.75	7.34	7.34
	7.39	7.39	7.15	6.89	6.65	6.55	6.55
	7.39	7.29 -0.06	6.99 -0.16	6.85 -0.04	6.65 -0.14	6.55 -0.20	6.55 -0.20
	7.39	7.35		6.89	6.75	6.69	6.59
	7.39	7.29	6.95	6.89	6.65	6.59	6.39

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	7.39	7.35	7.15	6.89	6.75	6.75	6.75
Heartland Bank		6.69	6.59	6.45	6.19
ICBC	7.19	7.05	6.95	6.85	6.59	6.49	6.49
	7.45	7.45	7.25	6.95	6.79	6.69	6.59
	7.39	7.39	7.19	6.75	6.75	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

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72 Comments

by JimboJones | 22nd Feb 24, 8:20am 1708543236

Our fixed term expires in July, hopefully the July CPI numbers force the RBNZ to cut, but I am not holding my breath.

Not sure what term we will take if rates remain like this, the 6 month is probably better than the 1 year, but the 6.99% 18 month might be the best option.

by Thinker | 22nd Feb 24, 8:23am 1708543429

6 months would be the go

by HouseMouse | 22nd Feb 24, 9:38am 1708547908

We also need to re-fix in July, I was previously thinking 6 months but now am thinking 12 months. I don’t think rates will be significantly lower by end of 2024, but I do think they will be by mid 2025.

by ChrisOfNoFame | 22nd Feb 24, 10:24am 1708550678

re ... "I don’t think rates will be significantly lower by end of 2024"

Where does NZ Inc's GDP factor into that?

If GDP falls or remains sub-par, and business & sales continue to contract, do you really think the RBNZ will be able to continue holding the HFL rhetoric?

Or perhaps you think 0.5% or 0.75% lower by end of 2024 isn't significant?

My guess is that the banks will immediately get real aggressive and while carded rates may not reflect OCR cuts - negotiated rates certainly will.

by HouseMouse | 22nd Feb 24, 11:32am 1708554721

Correct, I don’t think 0.5 lower is that significant.

by M0ralHazard | 22nd Feb 24, 11:53am 1708555990

I wonder if the OCR falls by 0.5% (because things are worse than expected), then are 1 and 2yr mortgage rates likely to fall by more or less than 0.5%?

by ChrisOfNoFame | 22nd Feb 24, 12:55pm 1708559722

Fair enough. But it's not 2020 anymore. We're back to 'normal'.

by Speedmax | 22nd Feb 24, 10:59am 1708552762

Hard to know if OCR will be lower in 6 months, but even if it is that does not mean lower mortgage rates….I’d be thinking about 12 months for that

by JimboJones | 22nd Feb 24, 11:40am 1708555253

12 months looked like the worst option based on current rates, almost the same as 6 months. You get a reasonable discount at 18 months.

by M0ralHazard | 22nd Feb 24, 11:55am 1708556113

ANZ's app has 6.99% for 6mths, 6.89% for 1yr and 6.79% for 18mths and 2 yrs this morning

by JimboJones | 22nd Feb 24, 12:07pm 1708556838

In that case I’d take the 6 month.

by ChrisOfNoFame | 22nd Feb 24, 12:53pm 1708559588

Which makes you a fool. Far better to ...

1) Pick up the phone and start haggling.

2) Get your financial info together and email other banks to see what they'll offer.

by Nifty1 | 22nd Feb 24, 8:34am 1708544063

OCR could hit 7% according to ANZ... scare mongering much?

https://www.stuff.co.nz/money/350185907/anz-7-ocr-possibility

by IT GUY | 22nd Feb 24, 8:49am 1708544944

They could be basing this on the belief that the FED has more work to do in the USA

by M0ralHazard | 22nd Feb 24, 10:16am 1708550186

I don't think the Fed will be raising, mostly likely not cutting as soon as everyone expected. The Fed or RBNZ raising now would be a mistake

by fortunr | 22nd Feb 24, 10:58am 1708552711

Neither will raise.

by Yvil | 22nd Feb 24, 12:52pm 1708559568

10% interest rates guaranteed ! LOL.

by HouseMouse | 22nd Feb 24, 9:41am 1708548095

Rubbish.

So have they said the economy and house prices would be absolute toast if that happened (which they would be). Of course not, that would scare the horses too much

I think ANZ’s views and forecasts this year will be proven to be an absolute joke.

by fortunr | 22nd Feb 24, 11:02am 1708552962

I agree 100%. No way the RBNZ will raise. Yes, they will likely adopt a hawkish stance in their speech, but the OCR peak is the current 5.5% - that's it.

by OldSkoolEconomics | 22nd Feb 24, 2:15pm 1708564502

The RBNZ is targeted to reduce inflation... if its persistent domestically (as it seems to be) or the Fed raises then RBNZ will raise the OCR til it drops. They accepted the economy would contract as a result and actually need unemployment to rise.

There is a weird belief that they will drop the OCR to protect DGP/employment/house prices.

by Speedmax | 22nd Feb 24, 11:05am 1708553107

….just like the last several years!

by Yvil | 22nd Feb 24, 12:51pm 1708559505

ANZ opening sentece: "It’s not impossible to imagine...". You can just about fill in the blank with anything at all, because it's indeed "not impossible to imagine" just about anything. It's not impossible that someone could imagine a flying pig !

by IT GUY | 22nd Feb 24, 8:48am 1708544880

Soon the door will shut on the Auckland summer sales window and we will go back to dreary winter weather, so much harder to showcase million dollar homes when there is no mud... House prices may be a lot lower by the time the next summer window arrieves.

by OldSkoolEconomics | 22nd Feb 24, 2:16pm 1708564572

cant think of any reasons for prices to rise.. plenty for them to fall.

by Slapheid | 22nd Feb 24, 9:26am 1708547162

Genuine question from this a wannabe homeowner:

Does anyone actually know what the hell is going on?

by IT GUY | 22nd Feb 24, 9:35am 1708547713

Houses are unaffordable for most wannabe homeowners..... we are in the midst of the correction, it's not over yet

by HouseMouse | 22nd Feb 24, 9:49am 1708548553

Agree.

I thought prices would be flattish this year, perhaps a 2-3% rise. I now think they will fall, perhaps 3-5%.

Having just finished my short story, time to get back to my expose of the media-RE debacle. Got the ideas and structure down, first chapter is titled ‘Smashed Avocados’. Publication early next year could be good timing, if this year pans out (as is likely) to make a mockery *once again* of the views of Gibson, Alexander et al

by ChrisOfNoFame | 22nd Feb 24, 10:28am 1708550903

Don't forget to include liberal splashings of what the bank economists had to say.

I love a dark comedy. This could be a ripper!

by interesting1234 | 22nd Feb 24, 12:34pm 1708558459

Plenty of material to draw from there!

by D581 | 22nd Feb 24, 1:46pm 1708562807

Got a title yet? May I suggest "The Big Rort"

by Eschaton | 22nd Feb 24, 9:35am 1708547721

Not because money itself is maniplulated in all sorts of ways, distorting price signals and behaviours .

by mfd | 22nd Feb 24, 9:35am 1708547753

No, and the more confident they seem the less you should trust them.

by Speedmax | 22nd Feb 24, 11:10am 1708553420

Of course not, nobody knows the future. But if you want to buy a home you’re doing the right thing by trying to inform yourself by seeking a range of views and reasoning. Good luck, don’t rush!

by ChrisOfNoFame | 22nd Feb 24, 1:20pm 1708561202

My advice to a wannabe homeowner is to ...

1) drop any and all ideas of what capital gain you may or may not get after 20 years

2) buy with a focus on only what you need now - drop every other consideration

3) recognise your first home will not be your last (or even remotely close to your 'forever home')

4) Pay down the mortgage as fast as possible by a) taking a 15 year or less mortgage and b) keeping the mortgage small and c) shoveling all spare cash - and interest rate reductions - into capital repayments

5) buy into a walkable area (cars are a terrible 'investment' and running them is only going to get more expensive)

6) don't let 'conventional wisdom' - especially from older people who claim to have made lots from their own houses - cloud your judgement. (CN's done some great posts as to how wrong this conventional wisdom is.)

7) consider all forms of housing - each has pros and cons (and for god's sake don't listen to conventional wisdom here either! the past is not coming back.)

by OldSkoolEconomics | 22nd Feb 24, 2:25pm 1708565116

Excellent advice.

I love point 5 - when we moved last year being local (walkable/bikeable) to everything was a key consideration. Climate change isnt being addresses and infrastructure is crap... so we will definitely all pay more to go anywhere.

I would add.....

8) choose something that can create extra income if possible (granny flat/extra bedrooms/rentable whilst on holiday) if things change for you financially. Or you can rent if you move overseas for a bit.

9) seriously consider how you will manage if interest rates go up considerably (there is massive potential for that to happen - wars/black swan events drive energy price rises, inflation thus can really jump from where it is, and the OCR would need also to rise)

10) be careful of budget for local rates - expect up to a 50% rise in the next couple of years. no matter what councils say now.

11) have a plan for if you lose your job or need to retrain (see point 8 above)

... have a well thought through plan and contingencies.

by 1harlow1 | 22nd Feb 24, 7:57pm 1708585036

All good advice, the only problem is that for most young kiwis, to follow it simply means not buying a house.

by OldSkoolEconomics | 23rd Feb 24, 7:58am 1708628285

In a falling market... not buying is the sensible option. Wait for it to bottom out and then look for bargains. Might be a couple of years.

by 1689 Baptist | 23rd Feb 24, 5:33am 1708619628

Great advice but point 1 does seem very pessimistic. Sure we are not going to see the 250% rise like we saw in the last twenty years. But zero? There will be some nominal gain if only for the land.

by jboss | 25th Feb 24, 11:05am 1708812333

Agree. I would also emphasise the importance of #1....Buy a house to live in it and ignore the temptation to view it as the easy path to wealth. The latter is why we are in this mess to begin with.

by Sam Bridgman-Smith | 22nd Feb 24, 1:23pm 1708561434

Hang in there. History suggests that every bubble eventually pops.

by Yvil | 22nd Feb 24, 1:38pm 1708562306

"Hang in there. History suggests that every bubble eventually pops." Written in 2000

"Hang in there. History suggests that every bubble eventually pops." Written in 2010

"Hang in there. History suggests that every bubble eventually pops." Written in 2020

by Pragmatist | 22nd Feb 24, 2:28pm 1708565302

Insert image of S B-S poking a Moeraki boulder with a needle..

by Sam Bridgman-Smith | 22nd Feb 24, 3:06pm 1708567575

This time it’s different ay?

by Sam Bridgman-Smith | 22nd Feb 24, 3:04pm 1708567486

Here’s a list of some famous bubbles that all went pop, including near the times you mention above:

1. Tulip Mania (Netherlands, 1637)

2. South Sea Bubble (UK, 1720)

3. Mississippi Bubble (France, 1719-1720)

4. British Railway Mania (UK, 1840s)

5. Florida Real Estate Bubble (US, 1920s)

6. Dot-Com Bubble (US, 1990s-2000)

7. Japanese Asset Price Bubble (Japan, 1980s)

8. U.S. Savings and Loan Crisis (US, 1980s-1990s)

9. Icelandic Financial Crisis (Iceland, 2008)

10. Subprime Mortgage Crisis (US, 2007-2008)

11. Spanish Property Bubble (Spain, 2008)

12. Irish Property Bubble (Ireland, 2007)

13. Greek Financial Crisis (Greece, 2009)

14. Chinese Stock Market Bubble (China, 2015- ongoing.)

Or do you believe that the NZ property bubble is not a bubble?

by Oats | 22nd Feb 24, 4:40pm 1708573204

I'd disagree with 14. China Stock market bubble. Looking at the index's historic P/E ratio for the index and isn't over valued compared to western markets over that time frame. Most of the time under P/E 15

by Yvil | 22nd Feb 24, 6:01pm 1708578112

Sam, you miss my point. My point was that it's very difficult if not impossible to know when prices will drop. For example, we knew prices would fall when the government locked down the country, except, house prices didn't drop, they rose.

by Sam Bridgman-Smith | 22nd Feb 24, 6:22pm 1708579369

Agreed Yvil but it’s not impossible to recognise when prices are too high.

A lot of people will regret buying in 2021 during peak prices. This suggests that sometimes it is best to wait until purchasing property

by Yvil | 22nd Feb 24, 7:41pm 1708584070

...and when do you know when the peak is ? Only way past it, with the benefit of hindsight! An overpriced asset can get way, way more overpriced before its price corrects.

by RickStrauss | 23rd Feb 24, 3:06pm 1708653973

And at present we have MPs in power with multi-million dollar conflicts of interest who seem unafraid to try to assist property and benefit their own personal investments. We have billions of rental yield welfare subsidies and price subsidies, and we have just seen a period in which ~$11-12 Billion of taxpayer money was used to stimulate property.

So...never know what NACT might try, to protect their personal property investments and those of their donors.

by Greg-Hamilton | 23rd Feb 24, 12:26am 1708601160

It hasn't popped NOT because it can't pop. Just because they didn't let it pop. They are being told that the economy will collapse...

We need strong govt and a public bank who can guarantee that people won't lose their home they live in. This way most of them won't be scared and can let overleveraged multi mortgaged Ponzis pop.

by peter.may | 23rd Feb 24, 9:35am 1708634134

Actually - no!

by MoneyMaven | 22nd Feb 24, 9:29am 1708547375

Intriguing move by BNZ! Dropping rates even with an OCR hike on the horizon. Real estate season is slow, and competition is fierce, so they're aiming to steal the spotlight. Remember, advertised rates are just the starting point, negotiate like a pro!

by 1689 Baptist | 22nd Feb 24, 10:46am 1708551975

Can't see an OCR hike happening. Its all smoke and mirrors from RBNZ

by Mr Frank | 22nd Feb 24, 9:40am 1708548029

All this will do is make Mr Orr very angry and retaliate with either very hawkish words next week or a hike, or else he will be taking a hike.

by HouseMouse | 22nd Feb 24, 9:50am 1708548645

Yeah, nah. These tiny cuts make sod all difference

by fortunr | 22nd Feb 24, 11:04am 1708553096

Yes, it will likely be hawkish words coming from the RBNZ next week - but definitely no action.

by solardb | 22nd Feb 24, 10:04am 1708549444

Of course they did, I refixed yesterday(with ANZ, so may not have changed their offer anyway).

by ChrisOfNoFame | 22nd Feb 24, 12:59pm 1708559974

Did you get a cashback for staying with them? (Yes. This is a thing.)

by M0ralHazard | 22nd Feb 24, 1:16pm 1708560967

I asked about this when I was haggling with ANZ. ~$3k cashback to stay (if you are outside of your previous cashback clawback period)

by ChrisOfNoFame | 22nd Feb 24, 1:25pm 1708561524

Did you get them to top up?

E.g. if there is still 2 years to run on the 3 years, get them offer a one year top-up. If you were to refinance with someone else you could get 3 years while only paying back 2.

by M0ralHazard | 22nd Feb 24, 1:53pm 1708563199

Ha no I'm not that smart. Can I dial you in next time I am negotiating?

by ChrisOfNoFame | 22nd Feb 24, 8:05pm 1708585542

Well, you know for next time. ... Hang on. Isn't there a 30 day stand down? Phone them back. ;-)

by Matt73 | 22nd Feb 24, 1:34pm 1708562079

What was that in % terms if you don't mid me asking? I've always been offered around 0.8% from ANZ

by M0ralHazard | 22nd Feb 24, 1:52pm 1708563127

Yeah around that ballpark

by 1689 Baptist | 22nd Feb 24, 10:44am 1708551849

If you are a proven reliable customer you should be able to negotiate 0.3-0.5% below the carded 1 year rate. The banks are absolutely creaming it at the 1-2 year carded rates atm. Just compare with the international swap rates, the longer term rates, The equivalent rates offered by smaller banks and even with the current OCR.

by HouseMouse | 22nd Feb 24, 11:34am 1708554848

And a cash back

by Due Diligence | 22nd Feb 24, 10:42am 1708551773

OCR rise was never going to happen

by Chaosinflesh | 22nd Feb 24, 11:53am 1708556019

Same old, same old. OCR review about to happen, miniscule rates drops the week before.

by Kate | 22nd Feb 24, 12:58pm 1708559899

Government income tax cuts coming up soon - like the AKL fuel tax cut - likely to be mildly inflationary.

He'll hold to see what comes out of that wash.

Meeting the government's inflation target band is all he has as a means to save his reputation with a now 'hostile' employer :-).

Saving face errs on the side of hawkish.

Don't worry about fixing for longer - if we get a petrol price spike (not unlikely given the global conflicts) - it'll be hikes on.

Just my guess.

by Yvil | 22nd Feb 24, 12:58pm 1708559888

Banks squeezing their NIM's (lowering rates whilst swaps are rising), is not a good indicator for house sales volume (not necessarily price). Banks are a leading indicator, as wannabe buyers need to get their finances organised before purchasing a house. To me this sounds like BNZ is not getting enough enquiries for new home loans now, which will result in fewer sales in March. (compared to previous March months)

by Northern Lights | 22nd Feb 24, 1:15pm 1708560901

My first New Year's prediction that the price of bitcoin would peak in January is toast. I did not expect the price of bitcoin to be close to reaching it's former peak.

Likewise the S & P 500 has passed it's 2022 peak. These two indicators tell me that there is more worldwide liquidity available for speculative assets than I thought there was and that the time lag between bank liquidity levels and asset price level change is longer than I have estimated it to be.

Which leads me to conclude that by the end of this year, and now forwards into the first half of next year house price rises will be greater than I had estimated.

We have a govt that is tamping down fiscally, restricting opportunities in the real economy. Which means investors will look to the speculative economy for returns. We have a large pool of liquidity looking for a home that will move out of interest bearing deposits once interest rates start to fall. And we have a RBNZ that is determined to hold the tide back which will build up the dam of liquidity and the force behind it even more.

I think that speculative assets are going to be the winner again. However if the RBNZ rigs it with it's various ratios so that only the wealthiest can benefit from a surge in real estate prices then the peasants will try their luck in more opaque unregulated corners of the financial universe and that will have even worse consequences for the NZ economy than would otherwise have been the case.

Be careful with the financial virtue signaling Mr Orr please. Getting understanding on the fiscal side from this govt is going to be just as difficult as it was with the last one.

by J.C. | 22nd Feb 24, 10:17pm 1708593451

My first New Year's prediction that the price of bitcoin would peak in January is toast. I did not expect the price of bitcoin to be close to reaching it's former peak.

Maybe you don't understand the dynamics of the fiat price of Bitcoin. Not sure why Jan would have been the peak price for ratty.