Kiwibank announces 'last call' for its sub 4% one year home loan offer, signaling a rise to come on Monday

Kiwibank has advised that its 3.99% one year fixed home loan 'special will end this weekend.

This rate has been available from Monday, August 20, so the 'special' period has only been two weeks.

On Monday, the rate will revert to 4.19%, the same as it was before it was dropped. Their standard rate will also rise to 4.69%.

This change will mean that only HSBC Premier offers any rate below 4%.

Over that period, the wholesale swap rate for a one year duration has moved down from 1.98% to 1.93%, a -5 bps reduction, most of which has come in the past 24 hours.

In fact, there is downward pressure on wholesale rates across the curve even if today we are seeing a minor +1 bp firming.

See all banks' carded, or advertised, home loan interest rates here.

Here is the full snapshot of the fixed-term rates on offer from the key retail banks.

below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
as at August 31, 2018 % % % % % % %
               
4.99 4.29 5.15 4.49 4.85 5.85 5.99
ASB 4.95 4.29 4.39 4.49 4.79 4.95 5.59
5.35 4.29 5.05 4.49 4.85 5.89 6.09
Kiwibank 4.99 4.19   4.39 4.85 5.19 5.39
Westpac 5.25 4.29 5.15 4.49 4.85 5.89 4.99
               
4.80 4.24 4.45 4.49 4.85 5.39 5.59
HSBC 4.85 3.99 3.99 4.19 4.69 4.99 5.29
HSBC 4.99 4.19 4.49 4.49 4.85 5.39 5.55
4.85 4.24 4.29 4.29 4.85 5.55 5.69

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

And TSB still has a 10-year fixed rate of 6.20%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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20 Comments

Wholesale funding pressure starting to bite

Except that wholesale rates are basically unchanged, been slightly lower now than this time last year and in turn that was slightly lower then the year before and so forth...

I'm very lucky, I met my ANZ business banking manager on Tuesday, mentioned the Kiwibank special and he matched the rate for a loan renewing in September : )

I'm not sure if you're being sarcastic, but it's not luck that your bank matches another bank's rate. Heck, they should even be beating it if you've got your whole banking portfolio with them.

Yes and no. Banks should absolutely match other banks in most instances, but i have seen plenty of cases where they flat out decline (for example the big 4 dont generally match HSBC's sub 4% offers). I hear plenty of case of staff at a particular bank, getting a better deal at another bank, and their employer not matching it. But the general thrust of your comment, that banks should match is something people do need to be more concious of.

Banks will only 'match' etc these days IF a review of the relationship measures up to new guidelines. Try getting '3.99%' if you have 10% LVR for instance! (Many borrowers still do; a legacy of past lending, and in those cases 'letting sleeping dogs lie' works on both sides of the loan!). The risk with all present renegotiations is that the bank will 'ask' the borrower to bring the loan(s) more into line with current guidelines.

When I first contact my ANZ manager about rates he offered 4.15%, then I mentioned the Kiwibank offer and he matched it. Kiwibank's special ran for only 2 weeks so yes, I consider myself lucky : )

Yvil, has your story changed just to suit the article? In another thread you mentioned having cleared all debt in anticipation of the coming downturn.....

The truth is easier to remember ;-)

lol TSB wouldn't match, so I switched to Kiwi bank at 3.99% + they used their layers so no legal fees + they gave me $1500 cash - overall interest savings from what i was on is 1500$ for the term so im up 3000$ for the move :D + i borrowed a extra 1500$ for fun , but im on 52% equity.

What's the claw back period on that cash? BNZ are four years so if you have to pay back a portion of it if you leave early.

Was at 4.65 for 18 more months
Cost of the move was 700$ saves me $1500 at 3.99 interest so I'm up $800 plus gets me out of 18months . rates are only heading down. Year to year it is.

I believe it is a conflict of interest for a bank to use its lawyers to complete your conveyancing?

Might not be there's I dont care they are taking care of it all so sweet.

Westpac Australia starting to raise mortgage rates. How connected are we to the trends there?
https://www.bloomberg.com/news/articles/2018-08-29/westpac-becomes-first...

Very connected but bank rates go up and down all the time, its difficult to discern a trend from a single bank or even a group of banks over a short time frame.

I'm sure the Ozzy banks realize that when the property market is dropping that they need to ease their rates. Though prices still very high in most Australian cities though at least they have much better wages then ours to support those high prices.

Problem is we have almost the equivalent high property prices without the wages to support those high mortgage costs.

Article: The huge salary you need to earn to buy a home in Australia
https://www.news.com.au/finance/real-estate/buying/the-huge-salary-you-n...

Just clicked renew on my Kiwibank internet banking, four clicks later and I'm locked for another year at 3.99. Down from my last year at 4.09, too easy.

Noone in NZ should be paying more than 4.3% on their mortgage.
Unless they are gullible or fearful and have fixed for more than 18 months.

The rates will continue to drop in a declining market other wise the mortgagees will pile up and unpaid loans are bad news for banks.

I'm not entirely sure if that will be case. It would be a desired outcome to relieve the pressure of default on those that have over leveraged, however what has to be considered is the funding gap that the banks fill with overseas borrowing of their own. If the Aussie dollar and Kiwi continue to fall, which I believe they will then the price of international borrowing may lead to rate increases as we have seen with Westpac Australia's recent rise in their floating rates. It could go either way still but I do think that credit will become more of a beauty parade when being offered to households. The better looking will get the better rates!