The annual spring home selling season is starting with low interest rates, keen lenders, and rising prices. We review who has the lowest interest rate offers

The annual spring home selling season is starting with low interest rates, keen lenders, and rising prices. We review who has the lowest interest rate offers

The spring home selling season has started strongly with low numbers of houses available for sale and stiff competition. Prices are rising in many markets.

Enabling higher bidding are the unusually low mortgage rates on offer at present. Lower interest rates means lower weekly mortgage payments and this enables borrowers to think they can take on a bigger loan. Use our handy mortgage calculator to work out the numbers in your case.

On Monday morning, ASB, BankDirect and Sovereign all lowered their 2 year fixed rate, claiming the most competitive position for this term at 5.25%, a drop of 20 bps. BNZ then followed with a market-leading cut to its 18 mth Classic rate.

Borrowers are also encouraged by a number of lenders who will lend with low deposit (equity) requirements.

Affordability, as measured by the monthly Roost home loan affordability indexes, show a fairly stable situation even if in a number of key markets it is fairly tough. In other markets, affordability is much easier. In most markets with two incomes, household affordability is reasonably straightforward for a median or first-quartile house.

Real estate agents and mortgage brokers report that first home buyers are active in the markets at present.

Adding to 'confidence' is the RBNZ who have indicated that rates will stay low for a long time yet. And the Reserve Bank does not look like it will impose LVR limits any time soon to quell house price inflation.

Who has the lowest home loan interest rates? Well it depends on the term you are seeking.

Here is a review of the lowest published offer rates by banks today.

Term Institution % rate p.a.
Variable Kiwibank 5.65%
  SBS / HBS 5.65%
6 months HSBC Premier 4.85%
1 year ANZ 4.95%
15 months TSB 4.95%
18 months BNZ Classic 5.25%
  ASB 5.45%
2 years ASB 5.25%
  ANZ 5.39%
  HSBC Premier 5.39%
3 years SBS / HBS 5.65%
4 years SBS / HBS 5.99%
  Westpac 5.99%
5 years SBS / HBS 5.99%
  Westpac 5.99%

Remember, you should always negotiate the rate. Your ability to win a discount from these rates will depend on the equity you have in your house (or the size of your deposit), the strength and reliability of your income, and other key factors.

It is quite conceivable that banks not in the above list, eg: BNZ or The Cooperative Bank may offer you the best deal in your case, so don't ignore them.

If you are self employed and find proof of income difficult, non-bank lenders may have arrangements that could work for you. Check those institutions listed on our mortgage rate page.

You can find up-to-date rates from all lenders on our mortgage page here »

(Updated with cut in ASB's 2 year fixed rate, BNZ reintroduces Classic 18 mth fixed rate.)

Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Comment Filter

Highlight new comments in the last hr(s).

David Chaston's spin:
The spring home selling season has started strongly with low numbers of houses available for sale and stiff competition. Prices are rising in many markets.
Terralink Managing Director Mike Donald's spin:
“On the other hand, there has been a large increase in the number of mortgagee sales for individuals, considered to be property investors, who own multiple properties. The figures indicate this group is under significant pressure, a reflection, perhaps of reduced equity as property values flatten or decline, and increase pressure on cash flows” says Mr Donald.
Colin Riden's analysis:
REINZ median dwelling price data -31/1/2007 to 31/08/2012 -
REINZ median dwelling price data - 31/1/2007 to 31/08/2012 adjusted for CPI inflation*

3 year and 5 year swap rates last week were at the lowest levels they have been in three months so expect fixed mortgage Interest rates to go even lower.
Demand at least a half a percent reduction off your banks published floating rate and you may be pleasantly surprised how keen they are to retain your business.

yes i think this is part of the problem - how far the other side, the unreported side drops. for example two of my floating mortgages are contracted to always be 50 basis points below the banks carded rate.
so if they advertised my floating rate I would then be on 4.6% floating with two lots of around $850k - that would be more fun than the 10.95% floating being charged at one stage...
in the meantime they almost need to advertise an undiscounted rate. A bit like getting a trade discount at a hardware store - if you apply and go through the right hoops you end up saving money when you ask.

"We review who has....." the greatest skill in selling credit drugs to idiots.
And we review the extent of the property market price manipulation that arises from the flood of cheap credit created out of thin air by the drug pushers with the full support of the thoroughly brainless idiots in the Beehive.
And finally we review the demise of the once thrifty Kiwi culture. The savings habits are now a thing of the past. The pollies enjoy a romp through the tax free capital property speculation gains. The parasites harvest the wealth from the nation in the form of profits for selling thin air credit to fools.
Next week we will take a look at what NZ could have become had thrift and saving remained a fixture of the culture. We will not report on what happens when the cost of credit doubles as it will. 

The floating rate is now a rort.  It's a cabal. They could lower them, but prefer to play smoke and mirrors with the fixed rate deals.  Probably fooling enough people though.