Pity Co-operative Bank.
A day after they launched a market leading three year mortgage rate, ASB has also taken a knife to the same rate, and cut it by much more.
The new ASB three year rate is 3.95%, lower than any bank two year rate rate and it extends the sub-4% range.
ASB has also cut its four year rate to 4.35%, a -60 bps reduction.
And its five year rate is down to 4.45%, a -69 bps drop. This doesn't quite match the 4.29% adoped by Kiwibank recently, but it is a big drop all the same.
Offsetting these reductions is a +4 bps rise in one year rate, taking the prior 4.05% carded rate to 4.09%.
ASB now has the most competitive rate selection of any big bank.
And because TSB still has its price-match offer in place, so do they.
Both now certainly offer much more attractive rate options than heavyweight ANZ. A response from ANZ and Westpac at the long end is likely soon.
By shifting their point of attack to long-end rates, banks essentially avoid having to trim their key term deposit rate offers. Almost all term deposit money rolls over for terms less than 1 year. All banks are doing is taking longer mortgage rates back to those on offer for shorter terms an dfunding that with a combination of short term customer deposits and wholesale money. In return they get customers to fix for longer terms.
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.
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 4, 2019||%||%||%||%||%||%||%|
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.