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TSB cuts 6 mth and 1 year mortgage rates; 1 year rate of 5.5% now lowest on market, as banks vie to expand lending

Property
TSB cuts 6 mth and 1 year mortgage rates; 1 year rate of 5.5% now lowest on market, as banks vie to expand lending
9th May 11, 9:30am by Alex Tarrant

TSB is now offering the lowest one year mortgage rate for any bank, after cutting the rate by 45 basis points to 5.5%.

TSB also cut its six month rate by 45 basis points to 5.9%.

See and compare all mortgage rates here.

Despite cutting its six month rate, TSB's rate is still above bank offers from ASB, BNZ, Kiwibank, Westpac, and HSBC (which offers the lowest on the market with its special 4.99% rate conditional on a borrower buying insurance from HSBC as well.)

Meanwhile, Kiwibank's special 5.4% six month mortgage rate expired on Friday, with the state-owned bank increasing the rate to 5.75% this morning.

(Updates with Kiwibank move.)

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9 Comments

by  Nicholas Arrand  |  9th May 11, 9:35am 1304890508

The lower they go ~ the worse things are in the property market! Still much further to go, then....

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by  President of P…  |  9th May 11, 9:45am 1304891123

Nick

Oh... is that why the banks as they lower their rates are just now going to be making stupidly outrageous profits instead of massively unimaginablely huge and outrageous over the moon profits

How about they are after more pie, and are confident to lend on the low rate, with less fat, as there is less risk as the property market stabilises and there is are no indicators of an OCR hike upwards anytime soon 

President of Property

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by  Nicholas Arrand  |  9th May 11, 10:20am 1304893202

Always possible. POP! But I maintain, as with any commodity' "If it isn't selling, drop the price'. That fits into your 'profiteering' thesis. If the Banks are making a good profit, why drop? And at even lower rates, they can still make your "stupidly outrageous', when the OCR drops again? Ask yourself. Why does NZ have an OCR at 2.5% when the States, the UK, Japan etc have virtually 0% cash rates? ( and all I hear from that lots is 'lower-for-longer'!) Is our economy so much better that we need it to be so? All I see is it encouraging an appreciating exchange rate, and an influx of foreign funds at a 'penalty' rate to New Zealanders. Hence I see the OCR...still, after all this time of believing so....at ...0%. What else will give us the impetus to go forward? After all, Canberra isn't our capital, and if all that's keeping our interest rates 'high' is Aussie, then I feel that's false security :)

Further mortgage rate falls to come, POP! Enjoy....

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by  President of P…  |  9th May 11, 10:28am 1304893703

well i always thought Doc Bollard was okay when he raised it that one time, because then he had more in his little box of tricks to play with - like space for more reductions before we hit zero.

one way or another i am glad i am off my 9.95% loan and now floating - lesson learnt...

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by  Nicholas Arrand  |  9th May 11, 10:33am 1304894038

And to add to your thought, POP:

Why are Dr. B and the Boys assuming all that extra, non immediately needed, debt through the DMO at the moment? Could it be that 'let's get it whilst we can' has as much to do with 'before we drop the OCR and nobody will want to give us the money at those low rates" as it does with, "before the next GFC"? Both bases covered!

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by  Andrewj  |  9th May 11, 10:19am 1304893140

Look at the UK ...

http://www.telegraph.co.uk/finance/economics/8500145/Bank-of-England-forced-to-cut-UK-growth-forecast-yet-again.html#dsq-content

"The Bank of England will downgrade Britain's economic growth forecast this week, confirming that the recovery is stalling as the Government's austerity measures take their toll"

It about trying to get growth going. They are running out of choices as what worked in the past fails today. They need low interest rates to encourage debt growth, as we know what happens in a fiat money system when the money supply shrinks.  They need to kick start the system and are pulling all the levers the problem is most Kiwis have no money.

Meanwhile savers are getting hammered but I think they will come out well ahead in the future all they need to do is sit it out as deflation does its stuff.

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by  FirstHomeBuyer  |  9th May 11, 10:51am 1304895060

Could this possibly indicate a slump in the mortgage lending market ? Wonder what the latest mortgage approval stats look like?

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by  David Chaston  |  9th May 11, 2:26pm 1304907971
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by  FirstHomeBuyer  |  10th May 11, 8:58am 1304974719

Thanks David.

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