Another major bank has adopted ASB's market-leading three year mortgage rate. TSB's price-match offer applies

Another major bank has adopted ASB's market-leading three year mortgage rate. TSB's price-match offer applies

This is a re-issue of our earlier story to record that BNZ has now joined ASB with a 3.95% three year mortgage rate offer. BNZ have made no other changes at this time however.

The table below is updated now.


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.

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 4, 2019 % % % % % % %
               
ANZ 4.99 4.05 4.19 3.99 4.49 5.55 5.69
ASB 4.95 4.09 4.19 3.99 3.95 4.35 4.45
4.99 4.05 4.79 3.99 3.95 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 3.95 4.35 4.45

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

Fixed mortgage rates

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8 Comments

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Wonderful news : )

nope.
Ever falling interest rates signal the world economy is chokin on too much debt
And that this is the only option until it implodes.

After that, we can expect rationing and hyperinflation as people spend to get rid of worthless currency

heres an oldie but a goodie

"“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich. [...]

"But we have also," continued the management consultant, "run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship's peanut." [...]

"So in order to obviate this problem," he continued, "and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and...er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances.”

Hi Yvil,

Yes - agree. It's getting better by the day!

TTP

Absolutely. It’s great news for home owners, but we must spare a thought for the retiree Term Deposit holders. Falling interest rates can only be seen to diminish their income.

Term Deposits are not worth the effort nowadays, you might as well keep your money buried in the garden if you are relying on income from them!
Well bought, positively geared rental property gives a far better return and with upside !

If everyone thought that way, the interest rates for lending would be much higher. Banks need to maintain deposit to lending ratios, so if there were less term deposits, then less can be lent.. if less can be lent, then a higher return would be needed...

Hopefully people are paying down big amounts of debt.there's never been a better time to do so!

And there’s never been a time with so much debt either. Good luck to those guys.