Fixed mortgage rates are on the move again as the bottom wholesale rate curve steepens.
ASB, New Zealand’s second-largest mortgage lender, made some changes, cutting some short-term fixed rates and increasing some of its long-term rates.
The bank cut its one-year fixed rate by four basis points to 2.25%. At this level, it is now lower than all its main competitors for a 12-month fixed-term contract. Its new price corresponds to the one-year offers from ICBC and HSBC.
ASB also cut its six-month fixed rate by 40 basis points to 2.99%, which is now well below all of its major competitors.
However, for fixed terms of three, four and five years, ASB increased rates.
Its three-year fixed rate offer is now 2.89%, up 24 basis points.
Its four-year fixed rate offer is now 3.19%, up 20 basis points.
And its five-year fixed rate offer is now 3.39%, up 40 basis points.
ASB’s three-year rate is now higher than its main rivals. Its four- and five-year tariffs are above all of its major competitors except ANZ.
ASB last changed its fixed rate mortgage offers at the end of January, when other big banks also made moves, all on the lower and short end of the market. fixed rate. It is likely that other banks will follow Friday’s ASB changes.
Update: Westpac has now announced that it will also change its rates, up and down, on Tuesday, April 27, 2021.
Since the January changes, wholesale swap rates have increased by 10 basis points, including for the one-year term. Short-term rate hikes have been curbed by central banks, including the Reserve Bank of New Zealand (RBNZ), by massive and aggressive interventions in the secondary market. In the case of the RBNZ, it is through their Large-scale asset purchase program. They intervene to increase demand in order to keep interest rates lower than they would otherwise be.
However, three-year swap rates are up 25 basis points, for four years they have increased by 35 basis points, and for five years they have increased by 45 basis points.
Perhaps the reason ASB’s one-year tariff offer was reduced is that it accessed $ 500 million from RBNZ. Loan financing program, which provides money over three years at 0.25%. All major banks other than ANZ have now plunged into this program.
A useful way to make sense of these new lower mortgage rates is to use our full function mortgage calculators. Term deposit rates can be valued using this calculator.
And if you already have a fixed-term mortgage that isn’t revolving at the moment, our break cost calculator can help you assess your options.
Here’s an updated look at the lowest fixed-term mortgage rates offered by major retail banks today.
In addition to the table above, BNZ has a single seven-year fixed rate of 5.20%.