The expected rash of home loan rate cuts by more banks is happening.
On Monday financial markets priced in a full 25 basis points (bps) cut at next week's Reserve Bank (RBNZ) monetary policy review, plus three more by the end of the year. That was a sharp move, pushed along by global risk-aversion pressures.
And local swap rates fell hard too.
Tuesday morning, BNZ took a knife to its longer fixed rates, taking all fixed rates three years and longer to under 6%. For shorter rates, that essentially matches ANZ's recent moves lower.
ASB and Kiwibank have also cut, although not as hard as BNZ.
But none trimmed floating rates like ANZ did. Nor cut its bonus saver rates. And BNZ did not announce any term deposit rate changes this time either, although both Kiwibank and ASB did cut term deposit rates.
Wholesale rates are falling fast now. But with the RBNZ review less than a week away, perhaps the retail bank adjustments will incorporate some hesitation, waiting to get confirmation of the central bank's move on Wednesday, August 14. After that things may settle for a short while.
But the 'settling' may only be relatively brief if the RBNZ's signals bolster the idea that the Official Cash Rate (OCR) could be down at 4.50% by the end of the year. It's at 5.50% now.
Almost all 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. See this.
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.
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 August 6, 2024 | % | % | % | % | % | % | % |
| ANZ | 6.99 | 6.85 | 6.49 | 6.34 | 5.99 | 6.84 | 6.84 |
 |
6.99 | 6.85 | 6.49 -0.20 |
6.25 -0.24 |
5.99 -0.36 |
5.99 -0.30 |
5.99 |
 |
6.99 -0.06 |
6.85 | 6.49 -0.16 |
6.34 -0.15 |
5.99 -0.40 |
5.99 -0.40 |
5.99 -0.40 |
 |
6.99 -0.06 |
6.75 -0.10 |
6.34 -0.15 |
6.09 -0.20 |
6.09 -0.06 |
6.09 -0.06 |
|
 |
7.05 | 6.85 | 6.65 | 6.49 | 6.29 | 6.19 | 5.99 |
| Bank of China | 6.95 -0.10 |
6.79 -0.06 |
6.59 -0.16 |
6.09 -0.40 |
6.09 -0.20 |
6.09 -0.20 |
6.09 -0.20 |
| China Construction Bank | 7.19 | 7.09 | 6.89 | 6.75 | 6.49 | 6.40 | 6.40 |
| Co-operative Bank | 7.05 | 6.79 | 6.69 | 6.49 | 6.35 | 6.35 | 6.35 |
| Heartland Bank | 6.69 | 6.49 | 6.35 | 6.15 | |||
| ICBC | 7.05 | 6.85 | 6.65 | 6.49 | 6.39 | 6.29 | 6.29 |
 |
7.05 | 6.89 | 6.69 | 6.49 | 6.35 | 6.19 | 6.19 |
 |
6.99 | 6.85 | 6.89 | 6.49 | 6.39 | 6.39 | 6.39 |
Fixed mortgage rates
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Daily swap rates
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