ASB's website now shows a new low two year mortgage rate.
They have matched Kiwibank at 3.99% for this fixed term.
And that also means that TSB will match the rate, under their extended price-match program.
The ASB reduction is a -30 bps drop from their prior rate.
ASB has also reduced its standard rate, but only by -20 bps.
In November 2018 ASB offered 3.95% for a fixed one year mortgage. Today's sub-4% two year rate is the lowest they have ever offered for a two year term
Yesterday, Kiwibank has reprised its 3.99% home loan rate for a two year fixed term.
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 19, 2019||%||%||%||%||%||%||%|
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.