ASB responds to recent rising wholesale funding pressures by raising carded four and five year home loan rates

ASB has raised its four and five year fixed mortgage rates by 16 basis points and 24 basis points (bps).

That takes ASB's rates for these terms up to ANZ's standard carded, or advertised, levels, and puts ASB 25 bps to 40 bps higher than equivalent carded rates from BNZ and Westpac.

Since the start of 2026, one year swap rates have risen about 10 bps, swap rates for two to five years have risen about 20 bps.

The popularity of long fixed rates hasn't been high. In fact, late in 2025, borrowers were rushing to convert their fixed rate home loans to floating rates in the hope that rates would fall, so that lower fixed rates were worth waiting for.

That seems like a busted plan now.

Remember, fie year fixed rates were under 5% as recently as October last year.

But deep within the end of year Reserve Bank (RBNZ) data on fixing patterns there was a perceptible rise by those fixing for long periods, out to five years. These borrowers appear to have locked in cycle low rates.

Those who have gone 'floating' are facing a rising trend and not the expected falling trend. They will have had the worst of both worlds - higher short term costs (floating), and when they decide to fix, new higher fixed rates.

Why are the swap rate signals pointing up? Two key reasons.

First, inflation seems to be rising again, and the RBNZ is extra attentive to those risks with a new Governor. Financial markets are pulling forward anticipated Official Cash Rate (OCR) hikes, even into periods before the 2026 election.

Second, global risks are rising, and while sovereign interest rates are not moving too much, risk premiums are rising. This could get a good kick along if investors lose confidence in US prospects, and Japanese policies. Together, these influences will be important.

In the background might be a third reason. The Aussie bank bosses are increasingly sensitive to margin compression. All banks have been adding services and costs over the past six months, and investors are sensing that future earnings may not turn out as they have come to rely on. ASB parent Commonwealth Bank of Australia's share price has fallen 15% in those six months. This might be a factor behind today's ASB move.

(Having said that, in the same period ANZ's share price has risen 19%, BNZ's parent National Australia Bank has risen 12%, and Westpac has risen 17%. So maybe we are making too much of the margin issue).

To compare mortgage rate offers in a way that includes the application and account fees costs (or break fee costs if you need to do that), and applying the impact of a cashback/legal fee reimbursement, or other incentive, you can use our home loan comparison calculator. You can find it here. Or, for convenience, we have added it to the bottom of this article.

We sense the ability to achieve meaningful discounts from carded rates is now much harder, so the impact of the incentives offered are currently playing an outsized role. Reader-reported mortgage rates are welcome. So please record them if you have them in the comment section below, which helps us stay on top of this aspect of the home loan rates market.

And still negotiate. How flexible banks may be will depend on the strength of your financials.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is here.

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, like now.

Here is the 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 January 27, 2025	%	%	%	%	%	%	%
ANZ	4.69	4.49	4.69	4.69	5.09	5.69	5.69
	4.65	4.49	4.65	4.75	5.09	5.55 +0.16	5.69 +0.24
	4.69	4.49	4.64	4.69	5.09	5.29	5.29
	4.59	4.49		4.69	5.15	5.49	5.29
	4.69	4.49	4.59	4.75	5.05	5.29	5.29
Bank of China	4.38	4.48	4.48	4.58	4.88	5.28	5.28
China Construction Bank	4.79	4.49	4.49	4.54	4.90	5.10	5.20
Co-operative Bank	4.65	4.49	4.69	4.79	5.09	5.29	5.49
ICBC	4.69	4.39	4.49	4.59	4.99	5.09	5.19
	4.69	4.49	4.69	4.69	5.09	5.29	5.29
	4.69	4.49	4.75	4.69	5.09	5.29	5.49