The Co-operative Bank cuts two of its home loan rates below 4%, pitching them for fixed terms different to most other rivals and setting them as market leaders for both

The Co-operative Bank cuts two of its home loan rates below 4%, pitching them for fixed terms different to most other rivals and setting them as market leaders for both

The Co-operative Bank has now joined its rivals with new lower home loan rates.

But instead of matching the 3.99% two year rate which is where most are positioned, it has adopted that rate for fixed six months and fixed one year rate offers.

And in doing so, it maintains its market leading position at six months, and joins HSBC as the market price leader for one year fixed.

The Co-operative Bank is the only bank offering sub-4% carded rates for six months.

In fact, for that term, the range is a very wide 1% with most banks positioned at 4.99%. The next lowest six month fixed offer is 4.85%, so the Co-operative Bank is way out on its own there.

And unlike the big banks, they require very few 'conditions' - the only one being at least 20% equity for "owner occupied" lending rates, as in the table below.

Swap rates actually rose at the end of Tuesday across the board, so for the time being at least these benchmarks are holding.

More details of the benchmark moves 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.

The Co-operative Bank did not announce any matching deposit rate cuts today.

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 27, 2019 % % % % % % %
ANZ 4.99 4.05 4.19 3.99 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 3.99 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
3.99 3.99 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%.

Fixed mortgage rates

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More good news - especially for investors and first-home buyers.


Good news for the existing customer/borrowers about to rollover - yes. First home buyers would do well to wait it out before committing to large borrowings. More house price falls to come.

Don't listen to your agent.

First-home buyers: with lower-quartile houses now showing the strongest capital growth - and destined to remain in strong demand - purchasing makes a lot of commonsense.

Who would want to leave their savings on term deposit at today’s abysmal interest rate returns?

Don’t be swayed by the negative sentiment expressed here, unless you fancy renting your life away - beholden to a landlord who gets rich at your expense.


Actually there seems to be such an obsession over residential property that there are "investors" obtaining 2% yields or less. I recommend renting to impoverish your landlord, while you invest at higher yields. You can make good investment gains at the expense of your landlord.

I am not sure why you are obsessed with savings accounts. Even those that are supper conservative with investing can pick up NZ Bonds through at ETF with 4% returns (based on the NZX figure). A better return that many properties and no significant exposure to an OBR event.

Sentiment in the markets has turned negative so you invest accordingly. Be a bear and a bull when the time is right, rather than being a bull making a one way bet.

First-home buyers: with lower-quartile houses now showing the strongest capital growth

That seems like a blatant misrepresentation of what the article here actually said.

What the article actually said was:

Since August 2016, Auckland's lower quartile price has remained within the price band from $640,000 to $680,000, suggesting the bottom end of the market has remained more or less flat during that time, but February's results show that prices are now testing that upper limit.

One possible explanation for this, at a time when sales volumes show the market is slowing in Auckland, could be that the market is easing from the top, while prices at the bottom end, as suggested by the lower quartile price, are kept firm by the shortage of affordable housing in the region.

Have you other evidence that suggests that buyers who actually bought have seen capital growth on those houses, rather than the explanation highlighted above?

Hi Rick,

Go look at the figures for Wellington & most of provincial NZ over the last couple of years. Houses in the lower-price bands have soared in that period.

Humble Palmerston North, for instance, records almost a 25% increase. Various other localities record a similar order-of-magnitude.

First-home buyers: don’t be swayed by the doomsayers here. Go seek the advice of your parents & grandparents.


Wellington is an exception as the rate of building any residential has lagged behind demand for a long time. Even with all the projects coming online it's not going to be enough. So yes, do buy in Wellington, in no way is my comment influenced by the fact that I will profit from heavy buyer demand Wellington.

Live in Palmerston North at your own risk. It's not worth it for a 25% increase in property value.

Unlike TTP I do not recommend seeking financial advice from family members. The reasons why should be self evident.

..turn around.

Ah, you're talking outside of Auckland.

Steve Eisman is expecting the bubble to burst between September and January. Oddly specific but he's stated that he's expecting large falls.

Despite the low rates it's a risky time to buy residential property. If you are going to buy a residential property be an owner-occupier, don't borrow to the absolute limit, and be prepared to weather a few rough years (don't expect to sell in the short term).

Hi Dictator,

You write, “Steve Eisman [whoever he is] is expecting the bubble to burst between September and January.”

What “bubble”??

“September & January” - what years??


Steve Eisman the guy who bet against MBS/CDOs in the subprime crash and made his fund about $200m USD. One of the main characters in The Big Short. You could have just looked him up using a search engine.

Sept 2019 and January 2020. Perhaps you would like to be contrary to his prediction? How many properties are you buying this year? You never seem to mention how much you are expanding your porfolio.

He's the guy that made a killing by predicting the last (US) housing bubble going pop and shorting the CDOs (ie, the GFC).. he's rather well known, they made a movie about him. "The Big Short", but they renamed the character, Mark Baum = Steve Eisman.

What bubble? The bubble you can't see because your head is buried in ________________.

And he's predicting this year.. but that will be the US Market.. who knows how soon it'll hit down here.

dictator is right. Despite low interest rates, there need be no hurry for FHB's to buy. Especially when further house price falls are forecasted by those in the know. Contemplating potentially tens of thousands saved in interest costs down the track is a good starting point! Keep saving.

What's currently providing limited support to the lower quartile? Interest rates at 80-year lows, loans from parents, 30-year mortgages, interest only loans and of course the raiding of kiwisaver funds.

With a backdrop of failing global sentiment, the NZ market is stuttering along on life support, what could possibly go wrong? JOB LOSSES!

Some of the early job losses will likely be in the construction industry - builders, tradesman such as plumbers, electricians, labourers, etc, as construction projects are delayed or cancelled due to the lack of financial viability of the project or lack of financing available. There have been a few construction companies that have gone bankrupt. Also building supplies as their sales experience a slow down.

Highly leveraged owner occupiers who are employed in these industries (and this is the major source of household income) are more vunerable to financial stress.

To set the record straight, in New Zealand employment is increasing (unemployment is falling); wages/salaries are increasing; and economic growth (GDP) is also increasing. Economic activity is such that the balance of employers report that it's becoming more difficult to recruit people.

Notably, however, interest rates are falling.

So the NZ economy is pretty healthy and the envy of most OECD countries........

Nonetheless, there remains a particular problem in New Zealand: the chronic shortage of housing stock - and soaring rents in most parts of the country. That goes some distance to explaining why there's intense/widespread interest in the housing market - as evidenced by newspapers, magazines and websites/blogs like this one....... Home ownership/investment remains extraordinarily popular in New Zealand.


To set the record straight? Thats about as straight as a pigs tail. The headline of the last press release on about unemployment is

"Unemployment rate up to 4.3 percent"

also includes these tidbits:
"The underutilisation rate rose to 12.1 percent in the December 2018 quarter, up from 11.4 percent in the previous quarter. This rise mainly reflected higher unemployment and underemployment. Underutilisation provides a broader gauge of untapped capacity in New Zealand’s labour market."

"The employment rate fell to 67.8 percent, down from its peak of 68.2 percent in the September 2018 quarter, due to stronger growth in the working-age population than for employment."

or go direct to the relevant page:

I wonder how many regular readers actually believe anything that you post anymore?

In terms of the long-run average, NZ is doing very well as far as unemployment is concerned. Our unemployment rate is nothing to be sneezed at - and certainly the envy of our trading partners.

Plus, NZ is showing strong wage growth. More workers have more money in their pockets. That largely explains the increases in GDP being recorded.

Pragmatist - you miss the big picture! NZ economy is in a nice position. (Would you rather be in England? Go figure it out.)


Funnily enough just book flights to London last night.. but not to stay.

1.9% is strong wage growth? "Wage rates increased 1.9 percent annually."

In fact, that's a sizeable increase - with the pundits predicting more to come.

Certainly, it doesn't suggest a stagnant economy.


No, its not a sizeable increase. It happens to be exactly the same as the CPI... so its zero real increase (if you believe the CPI accurately reflects inflation).

Got to love your sticktuitiveness in the face of being debunked.

"NZ has falling unemployment" you say - Actually unemployment edged up says Stats NZ. "Oh, sure, but it's still good"

"Wage inflation is strong" you say - Actually wage inflation under 2% says Stats NZ "Oh sure, but that's a SIZEABLE increase" you say. Really? Um, not sure the average worker agrees. About $19/w for median wage (and tax bracket creep eats some of that, so does all other inflationary costs)

At least your job in the Department of Pointless Arguments is safe eh. No it isnt, yes it is.

Youth Unemployment is the concern...the ticking time bomb.....

"Youth Unemployment Rate in New Zealand increased to 14.10 percent in the fourth quarter of 2018 from 10.30 percent in the third quarter of 2018. Youth Unemployment Rate in New Zealand averaged 11.96 percent from 2004 until 2018"

It’s not really getting reported much (Arrow obviously got attention) but the construction sector is on the precipice.
It’s all coming back to the crazy land values and construction costs. Look at all the overpriced 3 bedroom townhouses on the market at 900k plus in below average locations that are struggling to sell.They aren’t that price because the developers are making a gigantic profit....
If the government had its act together by now, as it should have, then the looming bust in the private market could have been mitigated.

"And unlike the big banks, they require very few 'conditions' - the only one being at least 20% equity for "owner occupied" lending rates, as in the table below."

ASB & Kiwi just have the 20% equity condition, no Owner Occupied condition. Westpac have equity requirement and also require salary credited into transaction account while BNZ and ANZ has the equity + salary + transaction account + other product.