Both SBS Bank and the Co-op Bank cut home loan rates in interesting ways, with one of them setting new market-leading levels

Both SBS Bank and the Co-op Bank cut home loan rates in interesting ways, with one of them setting new market-leading levels

Both the Co-operative Bank, and SBS Bank have made home loan rate changes today, both with moves that are interesting.

SBS Bank has joined the 3.99% trend, adopting that rate for two years fixed.

That leaves the Co-operative Bank as the only bank not to have that offer.

But they have done something more interesting - adopting market leading rates for three and four years, and the second lowest five year rate behind Kiwibank.

Their rate offers also include a market leading six month rate, far below any rivals.

The Co-operative Bank has also trimmed its term deposit rate offers and we will have more on that in a separate article.

These shifts lower come as the summer real estate selling season comes to a close. It has not been a stellar season, so banks will be trying to extend their competitiveness to make up for any shortfalls.

Fixed rate offers have moved lower across the board in 2019 as competition intensifies.

Recently, wholesale rates have started to trend down, in some ways supporting the falls in home loan rates. One year swap rates are down almost -20 bps since the beginning of March. They are down about -25 bps for most other durations. Most of that decline has come in the past week, especially at the short end. Since the beginning of 2019, the declines are almost double the March falls.

The last big mortgage rate change was Kiwibank's five year price reset to 4.29%, a complete outlier in the range of rates offered. It is a rate level that is lower than most three year rates. Apart from today's change by the Co-operative Bank, no others have attempted to follow them down or come close to matching.

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 April 3, 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 4.29
Westpac 4.99 4.05 4.09 3.99 4.59 5.29 5.49
3.99 3.99 4.09 4.15 4.35 4.59 4.69
HSBC 4.85 3.99 3.99 3.69 4.39 4.89 4.95
HSBC 4.99 4.05 4.25 3.99 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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The good news keeps coming.........

But NOT so good for those with bank term deposits.

Property investors: spare a thought for the elderly, who often rely on term deposit returns to supplement the pension.)


Dunno, the money I have in term deposits is providing a positive return.. Houses in Auckland.. are falling. Pretty sure a small gain is better than a small loss muliplied by a big old chunk of leverage.

NZ Property vs NZ shares is a discussion a lot of people need to have.

The NZ50 is currently on a tear and also has a lot of shares providing a very healthy dividend yield which hasn't been possible from investment property in AKL for since a long timeever (which of course makes a mockery of everyones tears over CGT - " we bought it for the yield....... " indeed)

Good point.

I have some actively managed funds from Fisher Funds... NZ and Overseas, return after tax in the last tax year (via reinvested dividends) > 13%. Not bad at all.

Why is it good news TTP?
Interest rates this low and flat across the loan terms is just another sign that the economy is going down hill from here. Perception becomes reality.
Don't get me wrong, low interest rates are great for my mortgage payments but not if it's as a consequence of my customers being unable to afford to buy what I am selling.

.the borrowers are the priority in this world. Does one join the crowd, leverage up and pump the asset bubble.....on the understanding that if we all join in they we will keep the system pumped?

Venezuela here we come (because that's the end game).

What are you selling Wilco?

We are farmers. From a personal perspective a lowering interest rate is great for us. Lower mortgage payments means more cash on hand and a subsequent weakening exchange rate means higher commodity prices once our income is converted back into NZ dollars.
My concern is I don't want to be a wealthy person in a buggered country. Extreme interest rates flat lining are one sign the global economy is heading down hill. In tough times people buy only the necessities. Claims such as free range, non GMO, non hormonal enhanced, natural grass fed wont mean a thing when people are just trying to survive.

Warning, unpopular opinion: I often hear about “sparing a thought for those on the pension and using term deposits to supplement their income”. I quite simply won’t. Making a generalisation here they will be around 65 years old and over, what is referred to as “boomers” this generation is the one that has lived through the most prosperous age that has ever been known and possibly that will ever follow. So if they find themselves nearing retirement without having saved enough to supplement their retirement that falls squarely on their own shoulders.
Calling up the bank and “Negotiating” a rate for their 6 month term deposit is hands down the laziest form of “investing” one can possibly do. Please do explain to me why someone who makes a 3 minute phone call once or twice a year should earn a 5-6-7 or 8% return on their money?
There were around 3.6 billion people on the earth in the 1970’s, yet now we have more than doubled that to 7.5 billion. Given this earth is a finite one it is naive to think one can live the same type of lifestyle they did 50 years ago with this many mouths to feed much less maintain the same level of Wage/asset/interest rates growth we have had until now.

An-Observation, you say “Negotiating” a rate for their 6 month term deposit is hands down the laziest form of “investing” one can possibly do"

Why do lazy people do this? Answer: They aren't greedy. They can easily afford the comfortable and fulfilled life they once dreamed of as kids and chose to work incredibly hard for it.

Horrible lazy people - lol!

I think the laziest form of investing is levering up and buying a house, doesn't stop the middle class demanding that it be maintained as a risk-free, high return, tax free investment scheme for their benefit.

But but but 20% interest rates while walking through the snow barefoot to work, wage freezes and and and and did I say 20% mortgage rates? The non-means tested pension is the last piece in the entitlement puzzle for this generation, how dare the banks not give them a 15% p.a. term deposit on their hard earned savings, it’s just pure and utter greed.