TSB Bank launches 'special' 1-year home loan rate, undercutting its rivals' advertised rates; SBS goes to 5.65% for 5 years

TSB, Co-op Bank and SBS have each cut fixed mortgage rates ahead of the RBNZ OCR decision tomorrow.

TSB Bank, the Co-operative Bank, and sister banks SBS and HBS have all cut fixed term mortgage rates, some to market-leading lows.

TSB Bank has introduced a new home loan "special" interest rate of 4.88% fixed for one-year.

This gives the Taranaki-based bank the lowest standard, advertised one-year rate of any bank, coming in just under Kiwibank's current 4.89% "special."

However, TSB says its special is only available for new borrowing worth at least $250,000, and on deals with a maximum loan-to-value ratio of 80%.

The Kiwibank offer isn't dependant on borrowers having a deposit of at least 20% or equity in their property of at least 20%. And Kiwibank's "special" is available to both new and existing customers.

TSB has also pulled its "special" 15 month rate of 4.95%.

Through this offer the bank had been offering up to $1,000 towards legal fees and an iPad or iPhone 5.

See all advertised mortgage rates here.

At the same time the Co-operative Bank has cut its one-year fixed rate to 4.94% from 4.99%.

And, SBS/HBS have also reduced their one-year fixed rates to 4.95% from 4.99% and their five-year fixed rate to 5.65% from 5.99% which is now the market leading rate for this term.

  1 yr 2 yrs 3 yrs 4 yrs 5 yrs
           
4.95% 5.45% 5.80% 6.10% 6.30%
ASB 4.95% 5.45% 5.75% 5.95% 6.25%
BNZ 4.95% 5.40% 5.80% 6.10% 6.30%
Kiwibank 4.89% 5.25% 5.65% 5.99% 5.99%
Westpac 4.94% 5.45% 5.90% 6.15% 6.25%
           
Co-op Bank 4.94% 5.35% 5.75% 5.99%  
HSBC Premier 4.99% 4.99% 4.99% 5.50% 5.75%
SBS / HBS 4.95% 4.99% 5.65%   5.65%
TSB 4.88%* 5.30% 5.75% 6.10% 6.30%

--------------------------------------------------------------

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 or click on the "Register" link below a 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.

9 Comments

If I was given the ipad/iphone, I would be asking for the cash difference to pay off the loan, as you would still be paying for it in the long run

wow...! inovative Banking...I'm shocked nobody thought of it before...way to go TSB, and remember the new creedo...
No holds barred on LVR's....

More fuel for the fire. This ever growing fire is getting kind of hungry and painful to maintain.
Quick, we need more fuel or it'll stop growing and might even start to [sensored word ahead] deflate.

Swaps up again today, which will be further hurting these tight margins.

I miss the old Trust Banks. Why were they sold off? What was done with the money?

Sold to Westpac many years ago with the proceeds going into charitable trusts from which the trusts are apparently earning far more than the Trust Banks were, with the investment earnings is beng donated annually to community and sports organisations.

that 5yr rate is none too shabby

Funny how the 5 year rate is lower now when ocr rises are fairly likely compared to 3 years ago when they weren't. There might actually be some proper competition in our banking sector at the moment! 

Thats one way to look at it.....or maybe the ppl who set that rate are confident that there isnt going to be much of a OCR hike for several years (if not a decade plus).
I did some sums a while back and we'd have to see retail rates over 7.5% in year 4~5 for me to lose money if I stayed floating....v fixing for 5 I stayed floating and Ive saved a packet in interest.  
So the Q is do some ppl see there is a paradym shift away from return to business as normal and drops are more likely than rises as I do? They are thus setting prices on that or, what is going on?
I dont think the level of competition has changed much in a decade? or I havent noticed them even more keen than they have been to shovel debt at you as fast as they can at me....