Following HSBC, Kiwibank, ASB and TSB, Westpac comes back with a 3.99% two year fixed home loan offer. That's now six banks with a sub 4% mortgage offer

Following HSBC, Kiwibank, ASB and TSB, Westpac comes back with a 3.99% two year fixed home loan offer. That's now six banks with a sub 4% mortgage offer
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Westpac is now the sixth fifth bank to offer the market a key mortgage rate under 4%.

With the peak home selling season within a month of ending, banks are rushing to ensure their best offer is on the table.

Westpac has had a 3.99% offer before, but with four others featuring that rate - or lower in the case of HSBC - now is the time to 'not miss out'.

Westpac's latest offer starts Friday, March 22.

But it requires a minimum of 20% equity - like every rival - and a transactional account at Westpac with salary paid into that account. Business and investment purposed Choices loans and Package customers are excluded however.

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.

Here is a link to Wednesday's similar cuts by ASB and TSB. ICIB also is offering a 3.99% rate for one year.

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 another -4 bps fall has occurred for two years. Since the beginning of 2019 the fall is -10 bps. More details of this bear flattening are here.

But 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. Separately, Westpac today trimmed -5 bps off its eight month 'special term deposit offer, taking it to 3.40%.

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

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 22, 2019 % % % % % % %
               
ANZ 4.99 4.05 4.19 4.29 4.49 5.55 5.69
ASB 4.95 4.05 4.19 3.99 4.49 4.95 5.09
4.99 4.05 4.79 4.29 4.49 5.19 5.39
Kiwibank 4.99 4.05   3.99 4.49 4.99 5.09
Westpac 4.99 4.05 4.09 3.99 4.59 5.29 5.49
               
4.05 4.05 4.29 4.29 4.49 4.89 4.99
HSBC 4.85 3.99 3.99 3.69 4.39 4.89 4.95
HSBC 4.99 4.05 4.25 4.29 4.49 4.99 5.09
4.85 4.05 4.09 3.99 4.49 4.95 4.99

In addition to the above table, BNZ has a fixed seven year rate of 5.95%.

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9 Comments

Its lower than that in the US ........ you can get a 10 or 15 year fixed mortgage for 3,75%

http://www.freddiemac.com/pmms/

but don't forget to add 'points'.

Thanks for the link David , I had forgotten the "points" which do make it tricky to compare .

Little wonder we have seen asset -price bubbles with such cheap money available

The flip side of such low rates over the past decade has been the damage done to savers who have seen their after-tax , inflation - adjusted returns pan out at close to zero .

Its only a bubble if it pops

What “bubble”?

TTP

Here's an oddity .. HSBC USA has a 4% loan rate, worse then HSBC NZ for $400k USD (similar to $500k threshold here). Sure, it's fixed 30 years, but no on in NZ would want that product because they want to trade their house before then.

On the flip side, they only offer 0.95% 12m term deposit (CD in American lingo). While the average here is circa 3.4%

If I am a TSB customer, why should I have to ask for the rate? They either offer it or not. It's not accurate to say they lowered their rate, when unlike Kiwibank, ASB and Westpac, they did not.

Sorry; I didn't understand. Whats with TSB ?Thanks

TSB have not lowered their rate.

What they are advertising is a rate match promise against Aussie banks, but in the fine print it says the onus is on you to ask. On their website, the 2 year rate still says 4.25%. Plus the rate match only applies to purchases, not refinances, which seems stink