TSB jumps first

Personal Finance / analysis

TSB jumps in with a market-low one year home loan rate of 6.69%, a 16 bps advantage over the major banks. Others are likely waiting for the RBNZ before assessing their rate moves

13th Aug 24, 9:50am by David Chaston

Just one more sleep until the August Monetary Policy Statement from the Reserve Bank (RBNZ).

Financial markets are pricing in about a two-thirds chance of a 25 basis points (bps) rate cut to the Official Cash Rate (OCR) being announced Wednesday.

We thought most banks would wait until the announcement and see how markets react to the decisions.

But one has jumped already.

TSB has gone low with its carded rate offers for home loans. And its new 6.69% one year fixed rate is the market-leading rate for that term. The only other bank that low for that term is Heartland Bank.

TSB has also adopted the 5.99% level than many main banks have for terms three to five years fixed.

That means that the lowest carded rates are now:

Fixed for ...	%	from ...
6 months	6.95	Bank of China
1 year	6.69	TSB, Heartland
18 months	6.49	ANZ, ASB, BNZ, Westpac, Coop Bank, Heartland, SBS Bank
2 years	5.99	SBS Bank
3 years	5.99	ANZ, ASB, BNZ, Westpac Coop Bank, SBS Bank, TSB
4 years	5.99	ASB, BNZ, Westpac SBS Bank, TSB
5 years	5.99	ASB, BNZ, Westpac SBS Bank, TSB

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.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at August 13, 2024	%	%	%	%	%	%	%

ANZ	6.99	6.85	6.49	6.34	5.99	6.84	6.84
	6.99	6.85	6.49	6.25	5.99	5.99	5.99
	6.99	6.85	6.49	6.34	5.99	5.99	5.99
	6.99	6.75		6.34	6.09	6.09	6.09
	6.99	6.85	6.49	6.19	5.99	5.99	5.99

Bank of China	6.95	6.79	6.59	6.39	6.09	6.09	6.09
China Construction Bank	7.19	7.09	6.89	6.75	6.49	6.40	6.40
Co-operative Bank	6.99	6.79	6.49	6.29	5.99	6.09	6.09
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
	6.99	6.85	6.49	5.99	5.99	5.99	5.99
	6.99	6.69 -0.16	6.65 -0.24	6.25 -0.24	5.99 -0.40	5.99 -0.40	5.99 -0.40

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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43 Comments

by mark_a | 13th Aug 24, 9:53am 1723499611

Yawn - tell me when its got a 5 in the front......

by Hamish | 13th Aug 24, 10:03am 1723500189

+50% ???

by TronMVP | 13th Aug 24, 4:44pm 1723524247

You want us to tell you now?

Ok, SBS 2 year rate is 5.99%

by CrusaderNZ | 14th Aug 24, 1:22pm 1723598568

You seem troubled...

by Retired-Poppy | 13th Aug 24, 10:15am 1723500941

We were told house prices would first stabilize then start rising on the collective belief that interest rates had stopped rising, then again on the anticipation of imminent falls. Now banks have now initiated cuts on the back of weak lending demand - to date house prices are still falling.

Throughout previous downturns employment insecurity was center of stage to. International events beyond our control could easily turn this overdue correction into something else courtesy of a perfect storm.

by donny11 | 13th Aug 24, 10:15am 1723500951

A lower CPI without the corresponding fall in interest rates makes money more attractive than it would have been with a higher CPI. A 5.5% OCR with a 3% CPI makes for more attractive term deposits than a 5.5% OCR with a 5% CPI. This increase in value of term deposits makes hard assets relatively less attractive so they fall.

by safeashouses | 13th Aug 24, 10:25am 1723501556

Could you explain what you are saying and speak slowly pls I am a spruiker ie speculord pls

by Retired-Poppy | 13th Aug 24, 10:29am 1723501792

🤣😆👍

by Iceman | 13th Aug 24, 11:48am 1723506488

Retired Poopy - just shut up mate. I see you commenting on every article here with the same old nonsense.

You don’t actually think the effects of recent cuts will already show in the housing market do you?

What is wrong with you? And before you even start - try control yourself with the personal digs this time.

by Baywatch | 13th Aug 24, 12:40pm 1723509619

The Ice Cube is melting...

by DingleDorf | 13th Aug 24, 12:51pm 1723510274

Must be sweating tear dropped shaped ice bullets.

Outbursts like his are generally (in the context of a financial news website, and in particular an article around interest rates) indicative of someone overleveraged and hemorrhaging cash. The stress is so much that all rational thought goes out the window, rage induced tunnel vision kicks in, and their vulnerability is exposed in the tone of their comment.

by Retired-Poppy | 13th Aug 24, 1:59pm 1723514352

Retired Poopy - just shut up mate

Iceman, are you stuck paying interest on an asset that's declining in value? Your volatile behavior of late indicates that you're not coping. Your behavior is telling more of your own financial predicament than mine.

try control yourself with the personal digs this time.

Funny!

I see you commenting on every article

Well that speaks volumes alone. Don't worry about me. Don't get angry, just sigh and move on - easy.

edit.

by Iceman | 13th Aug 24, 2:04pm 1723514660

My assets are cashflow positive. The only thing volatile is your trigger happy on every post on here.

Grow up 50 year old child.

by Retired-Poppy | 13th Aug 24, 2:07pm 1723514854

Come on Iceman, tell me how you really feel. Why do my posts annoy you so much. As creepy as it sounds, you've already admitted to reading my every post.

Anyway, I'm amazed at how many Spruikers are expecting house prices to be immediately impacted by lower rates. It's easy to tell that despite your comments to the contrary, deep down you do too - edit.

by Iceman | 13th Aug 24, 2:08pm 1723514913

Whoever reads the posts and comments know how trigger happy you are. That’s odd for someone your age.

The truth is - you are sweating your about to be 2% TD rates and there’s nothing you can do about it.

by Retired-Poppy | 13th Aug 24, 2:14pm 1723515270

you are sweating your about to be 2% TD rates and there’s nothing you can do about it.

Ha-ha funny! you posted the same thing a week or so ago and the rate was 3%! Are they really going down THAT fast?

Anyway, just sigh and move on. I'm really not worth the angst - easy :)

by safeashouses | 13th Aug 24, 4:20pm 1723522801

Judging by Icemans like poopy you are getting irrelavant.

by safeashouses | 13th Aug 24, 4:10pm 1723522205

What every Iceman is stuck on, does not matter the retired poopy comment gets double thumbs up. I must admit retired poppy you are getting boring TBH.

by TronMVP | 13th Aug 24, 4:50pm 1723524652

It's the same old stuff day after day from RP. Multiple comments on every property article from RP basically saying the same thing. At least Hawkes Bay was humerous, and NZgecko has a bit of poetry in his bizarre rantings.

by Retired-Poppy | 13th Aug 24, 4:55pm 1723524925

I'm sure you'll understand that my posts will mean all sorts of different things to different people. Such is life on online forums 😊👍

by Iceman | 13th Aug 24, 5:05pm 1723525508

Retired Poopy - there you go!

Others have noticed your nonsense comments on here too and have rightly called you out on them. You add nothing to this site.

by Retired-Poppy | 13th Aug 24, 5:51pm 1723528302

I can smell your desperation from here. I guess if you haven't already read between the lines I'm more than happy to dump a missile or three on any Spruiker parade. If this thread is anything to go by, it certainly hit the spot.

Edit add a Poopy 💩

by safeashouses | 13th Aug 24, 5:27pm 1723526845

@poopy - there it is........ you seem to not be able to fool all the people all the time anymore, now time for slippers and a pipe and call ol Karen over to make you a bit of alka-seltzer for the tummy

by CrusaderNZ | 14th Aug 24, 1:25pm 1723598719

"we were told??" It seems you read a lot of Opinion pieces and take them as fact or advice. The spend the rest of your time trying to pass on the blame for your bad decisions. Correct?

by ChrisOfNoFame | 13th Aug 24, 10:30am 1723501859

Will even 6.69% will look expensive after six months?

by JimboJones | 13th Aug 24, 1:27pm 1723512437

Maybe. It needs to look about 0.2% too expensive to justify taking the current 6 month rate.

by Yvil | 13th Aug 24, 10:41am 1723502482

I've been offered 6.65% from ANZ for a 1 year term for quite some time now.

by Colin Cameron | 13th Aug 24, 10:57am 1723503472

Yvil going into lawyers tomorrow to sign paperwork on new house with a new mortgage from ANZ will be interesting to see what they offer in terms as only got 35 percent debt to equity. Plus they are releasing one property as well.

by bw | 13th Aug 24, 11:13am 1723504411

As below. Whatever the rate is, it may have less to do with the LVR (whatever the future V part might be guessed at) but income, cash-flow and committed expenses.

by Colin Cameron | 13th Aug 24, 11:22am 1723504973

And only retail banks are locked into LVR not 2nd tier. I fully expect to only be dealing with 2nd tier in future was totally taken back when mortgage broker said let's go to ANZ and as stated above getting one house released from ANZ as well is a major bonus.

by bw | 13th Aug 24, 10:51am 1723503098

What is the overriding criterion any Lender takes into consideration when making a Loan, whatever the Price (%) is?

Answer: The ability of the borrower to repay the Loan.

And the lower rates go, the more that question is being studied. Because that will mean more and more applicants are failing whatever tests the Lenders are doing, and so they have to keep dropping rates until they get suitable borrowers.

Lower Rates doesn't make it easier to Borrow, it's shows it harder.

by sgtshortcut | 13th Aug 24, 2:01pm 1723514483

What do you mean “Lower Rates doesn't make it easier to Borrow, it's shows it harder”

I thought the low rates made it far easier to borrow hence the amount of people who over leveraged a couple of years back?

by estateagent | 13th Aug 24, 1:08pm 1723511302

Still a very high rate - needs to be 1 year fixed at 5% to make any real difference

by huttman | 13th Aug 24, 1:17pm 1723511860

10% by end of year, guaranteed!

by JimboJones | 13th Aug 24, 1:53pm 1723514032

ASB banking app, 19th July:

6mth 6.95%

12mth 6.72%

18mth 6.62%

24mth 6.49%

Have rates actually come down at all?

by General Comment | 13th Aug 24, 3:01pm 1723518061

My personal opinion is I'd never take a rate from an app. That's the "easy" offering, trying to tempt customers with "simple, convenient" loan rollovers. Put in the hard yards, ask for better (the table above shows a better rate is already available), and don't give up until you see the whites of their jocks. Threaten to leave if you must. Heck, actually leave if you can get better elsewhere.

by JimboJones | 13th Aug 24, 5:03pm 1723525425

"the table above shows a better rate is already available" - those rates were from July, since then swap rates have declined massively but you will struggle to get much better out of your bank I reckon.

The app rates do tend to be quite good these days, I think you will struggle to do better without having a better offer from another bank.

by General Comment | 13th Aug 24, 5:13pm 1723525988

Ah, I missed the date in your post, I thought that was your current offers. I've done that a bit today. Work sucked accordingly.

by npc | 13th Aug 24, 4:00pm 1723521634

ANZ online banking is trying to bait me with the following rates:

6 m: 6.85%

1 y: 6.65%

18 m : 6.29%

2 y: 6.29%

I'll be giving them a call for better rates closer to the time. Anyone still getting cash back?

by GAR | 13th Aug 24, 8:48pm 1723538923

Same rates for me for (as of today) $371,669.75 of lending. Currently on 6mths rolling off on 3 Sept 2024.

We got $1500 cash back ~6mths ago, wondering if we can get another cash back even though we have to stay with ANZ for another 2.5 years or else have to pay the $1500 back?

by Pragmatist | 13th Aug 24, 6:51pm 1723531883

I notice kiwibank doesn't appear anywhere in the table of market leading rates.

by HouseMouse | 13th Aug 24, 9:58pm 1723543094

So is it a false start? Or is TSB super fast out of the start?

by DaveB1978 | 13th Aug 24, 11:14pm 1723547670

They just advertised what others are already giving but not advertising.