BNZ the latest bank to cut fixed mortgage rates, offering the lowest 18 month fixed rate of any main bank and equal low for other popular terms. Heartland Bank, Kiwibank cut too

Another major bank has cut home loan rates. Update: Now Kiwibank has announced lower rates.

And a set of challenger banks are in the action too.

We have had rate changes (all cuts) from BNZ, Bank of China, and Heartland Bank Friday. These follow Westpac, ANZ, and the Cooperative Bank earlier in the week.

This jockeying changes where relative positions of the main mortgage lenders have landed in their carded offers.

We still have rate changes to come from two majors, ASB and Kiwibank. And TSB, SBS Bank, and others are yet to move down too.

At this point in the current cycle of rate-cutting, the lowest rate from any bank is by SBS Bank with their 6.19% four and five year carded rates.

For the increasingly popular six month fixed, it is BNZ displaying the lowest carded rate at 7.05% the same as offered by ANZ, Westpac, Bank of China and the Cooperative Bank.

The cuts by BNZ today position it also the lowest among the main banks for a fixed term of 18 months, and equal with many of their main rivals for terms of 1, 2, 3, 4 and 5 year rates.

Update: Kiwibank announced changes that become effective on Monday. Basically they match their rivals.

But it is Heartland Bank's -20 basis points (bps) cut that gives it the lowest position of any bank for all the terms they offer; 12, 18, 24 and 36 months fixed.

Having noted that, we should also note that Heartland Bank's offer is online only. As such, there is no wiggle-room for negotiation with them. And brokers don't get paid by Heartland so there is no incentive for them to offer you these rates. You would have to go direct via their online process.

But almost all other banks will have some flexibility in their rate offers. So the carded rates are just the start. Negotiate. How flexible they may be will depend on the strength of your financials. And don't forget, banks have savvy tools at hand to 'know' the likely valuation of your property, so if the loan-to-value ratio (LVR) is near 80% you may not find them very accommodating for a lower rate. With falling house prices, the point where low equity premiums start applying is shifting around as well. Beware.

And 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.

Even though the Reserve Bank has not actually cut official rates yet, the market is doing that "for them". Words and signals matter in financial markets.

Finally, we should note that both BNZ and Heartland Bank made compensating reductions in their term deposit offers today too.

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.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment. Updated with Kiwibank changes effective Monday.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at July 19, 2024	%	%	%	%	%	%	%
ANZ	7.05	6.85	6.69	6.49	6.35	7.14	7.14
	7.24	7.14	6.89	6.75	6.39	6.39	6.39
	7.05 -0.19	6.85 -0.29	6.65 -0.24	6.49 -0.30	6.39 -0.26	6.39 -0.25	6.39 -0.16
	7.05 -0.20	6.85 -0.14		6.49 -0.30	6.39 -0.26	6.39 -0.26	6.39 -0.26
	7.05	6.89	6.79	6.75	6.39	6.39	6.39
Bank of China	7.05 -0.04	6.85 -0.06	6.75	6.49 -0.16	6.29 -0.20	6.29 -0.10	6.29 -0.10
China Construction Bank	7.19	7.09	6.89	6.75	6.49	6.40	6.40
Co-operative Bank	7.05 -0.18	6.79 -0.20	6.69 -0.20	6.49 -0.30	6.35 -0.30	6.35 -0.20	6.35 -0.20
Heartland Bank		6.69 -0.20	6.49 -0.20	6.35 -0.20	6.15 -0.20
ICBC	7.19	7.05	6.79	6.69	6.59	6.49	6.49
	7.24	7.14	6.89	6.49	6.35	6.19	6.19
	7.39	6.99	7.19	6.75	6.65	6.59	6.59