The spring real estate selling season is here and our largest home loan lender is cutting two key fixed rates. We explain why and the context in a time of rising wholesale rates

Despite wholesale interest rates rising, ANZ has cut two key fixed mortgage rates.

They have taken -16 bps off their 18 month fixed rate, taking it down to 5.29%.

And they have taken -14 bps off their two year fixed rate, dropping that to 5.35%.

The result is that ANZ now matches BNZ on the 18 month rate, and matches BNZ for two years. However Westpac has a lower 5.29% two year rate still.

These changes are probably more about ANZ moving from a tough rate position and matching others, than setting any new competitive rate levels.

However it is interesting that they feel they need to do this when the wholesale cost of funds are rising.

And they are rising quickly now. In the past week, the one year swap rate is up +10 bps and the two year swap rate is up +14 bps. From a month ago these rates have risen +45 bps. These are increases that are not matched [yet] at the retail level.

One reason for this maybe that competitive pressures are very strong in a market that is exhibiting lower than expected volumes, so banks are competing now in a zero-sum environment.

All this comes on a day that benchmark bond rates in the US pushed higher again. Indication from our own bond markets is that we are following so wholesale swap rates are on the move higher too and maybe even more sharply than in the US. That likely means we are in for more borrowing fixed rate hikes soon.

And that won't be helped by the imminent RBA rate decision which is widely expected to push higher as well. In turn, financial market bets are rising that the RBNZ will raise rates at its October review, even though in the past they themselves have said it is unlikely. Remember it is a decision that has to be made just before the election. But the recent review of the RBNZ's pandemic response criticised them for not moving fast enough when conditions changed then. A fast-moving international background probably requires prompt action, which is why those financial market bets are rising.

You can still get lower rates from the challenger banks, especially the Chinese ones. And banks like the SBS Bank and TSB are not so directly affected by swap rate shifts. Their cost of funds are more influenced by what they pay depositors. So for them, the reaction of their deposit base will play a key role in how they set home loan rates.

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 incentives, 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.

Negotiate, even with your mortgage broker. How flexible banks may be will depend on the strength of your financials.

One other 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.

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 September 30, 2026	%	%	%	%	%	%	%
	4.79	4.99	5.29 -0.16	5.35 -0.14	5.59	6.39	6.49
	4.79	4.99	5.35	5.45	5.45	5.49	5.59
	4.89	5.19	5.29	5.35	5.59	5.65	5.75
Kiwibank	4.85	5.15		5.39	5.59	5.79	5.89
	4.89	5.19	5.45	5.29	5.59	5.65	5.75
Bank of China	4.58	4.68	4.83	5.08	5.18	5.48	5.68
China Construction Bank	4.35	4.49	4.49	4.64	4.90	5.10	5.20
Co-operative Bank	4.89	5.19	5.35	5.49	5.69	5.89	5.99
ICBC	4.55	4.65	4.85	4.99	4.99	5.45	5.65
	4.79	4.99	5.29	5.44	5.44	5.49	5.49
	4.79	4.85	5.35	5.49	5.69	5.89	5.99