Less than 24 hours after the RBNZ dovish monetary policy review, Westpac has trimmed some fixed home loan and term deposit rates, with the changes effective Friday, July 12, 2024.
And they are unlikely to be the only one.
Westpac last trimmed rates at the end of June, but those just took them down to where their rivals already were.
This time, they are leading short rates lower.
They have cut -19 bps from their fixed six month home loan rate, taking it to 7.05% and about -20 bps lower than their main rivals. In fact that is close to a low for any bank.
Their cut to the one year fixed rate is a full -25 bps, now down to 6.89% and lower than Kiwibank by -10 bps, and lower than their Aussie-owned rivals by -25 bps. This new one year rate is the lowest from any bank, now matching Heartland Bank.
Their 18 month fixed rate goes down to 6.79%, -10 bps below their main rivals.
The carded rates we report here can be different to the rates banks might offer in their banking app. We would like readers to reveal what their banking app shows as the potential offer rates. Please add that market intelligence in the comment section below.
A quick check of the wholesale swap rate chart below gives a clear understanding of where funding costs are heading.
Westpac has also decreased a range of term deposit rates for savers by between -5 and -10 bps.
They have cut their six, nine, twelve and eighteen month term deposit offer by -10 bps and their 8 month offer by -5 bps to 6.0%. These changes position Westpac below their main rivals for these terms. The most dramatic difference is for a six month term deposit where Westpac is now at 5.80% but BNZ is still at 6.15% and will be until the end of the day on Wednesday, July 17, 2024. That is a 35 bps difference.
Even though the RBNZ has not actually cut official rates yet, the market is doing that "for them". Words and signals matter in financial markets.
In a falling market, the squeeze will go on challenger banks. Westpac's move has eliminated much of the rate advantages they thought they had.
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. Break fees will be minimal in a rising market. But they 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 July 12, 2024 | % | % | % | % | % | % | % |
| ANZ | 7.25 | 7.14 | 6.89 | 6.79 | 6.65 | 7.34 | 7.34 |
 |
7.24 | 7.14 | 6.89 | 6.75 | 6.39 | 6.39 | 6.39 |
 |
7.24 | 7.14 | 6.89 | 6.79 | 6.65 | 6.55 | 6.55 |
 |
7.25 | 6.99 | 6.79 | 6.65 | 6.55 | 6.55 | |
 |
7.05 -0.19 |
6.89 -0.25 |
6.79 -0.10 |
6.75 | 6.39 | 6.39 | 6.39 |
| Bank of China | 7.09 | 6.99 | 6.75 | 6.65 | 6.49 | 6.39 | 6.39 |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.24 | 6.99 | 6.89 | 6.79 | 6.65 | 6.55 | 6.55 |
| Heartland Bank | 6.89 | 6.69 | 6.55 | 6.35 | |||
| ICBC | 7.19 | 7.05 | 6.79 | 6.75 | 6.59 | 6.49 | 6.49 |
 |
7.35 | 7.14 | 6.89 | 6.49 | 6.35 | 6.19 | 6.19 |
 |
7.39 | 7.14 | 7.19 | 6.75 | 6.65 | 6.59 | 6.59 |
Fixed mortgage rates
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Daily swap rates
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