Kiwibank has reprised its 3.99% home loan rate for a two year fixed term.
That represents a -20 bps drop.
The last time Kiwibank offered a sub 4% rate was in mid January 2019, and offer that lasted until the first week of February.
This initiative comes after Westpac ended its 3.99% one-year-fixed offer last week.
At the same time TSB has extended its rate match offer. And it has widened the coverage to all terms offered by ANZ, ASB, BNZ and Westpac.
That now means that it will match Westpac's eighteen month 4.09% rate because it is lower than TSB's own carded 'special'.
None of these recent changes go anywhere near to challenging the new low rates being offered by HSBC Premier. But HSBC Premier rates come with some relatively high qualification requirements.
Since the beginning of February, wholesale swap rates have moved little at the short end of one and two year durations. The one year swap rate is down only -6 bps and a similar fall has occurred for two years. Since the beginning of 2019 the fall is -12 bps. Since the beginning of March there has been no change.
And the main cost driver for banks is their cost of deposit funds. While these have slipped minorly at a handful of banks (about -5 bps) for most, these haven't moved at all. Given that more than 70% of bank funding is based on retail deposits, this doesn't support lower costs and therefore lower mortgage rates.
Here is the full snapshot of the advertised 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 March 18, 2019||%||%||%||%||%||%||%|
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.