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Mortgages

Mortgage Rates Daily Commentary
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Bank LVR limits on hold; Co-operative Bank cuts rates

Banks have not relaxed loan-to-value ratio limits for investors, despite the Reserve Bank's move to scrap LVR rules: [READ ON]

The Co-operative Bank has slashed its 18 month and two-year rate to 2.79%. Take a look at the latest rates here: [READ ON]

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Competition and more competition

Weekly home loan report: Competition and more competition – that’s the current theme as lenders cut their fixed rates to attract borrowers as floating rates look like being stable for a while.

Tuesday, January 24th 2006, 7:47AM

More lenders followed the leaders and announced decreases for two- and three-year fixed rates over the week to maintain or establish attractive offers for borrowers.

With the Reserve Bank is likely to leave the official cash rate unchanged at its review on Thursday, variable rates will stay in the current range of 8.50% to 9.75% until the next monetary policy decision in March.

Even then, the chance of a further rate hike is increasingly slim as economists forecast a stable cash rate for the majority of 2006 as the economy slows in coming months.

The major banks are offering floating rates centred around 9.55%, which makes the competition in the fixed rate sector where the battle for customers continues.

It’s the banks which are jumping to out-manoeuvre each other, rather than the broader lending market.

Kiwibank made the most aggressive move, cutting its three-year rate 45 basis points to 7.70% and its four-year rate 10 basis points to 7.95%.

Fuelling the market with competitive rates is an intriguing move for a government-owned bank against a backdrop of Finance Minister Michael Cullen and the Reserve Bank calling for New Zealanders to cool their housing appetite.

Others to join the race for clients were Westpac, which dropped its two-, three-, four- and five-year fixed rates by between 15 basis points (for two years) and 5 basis points (five years), and Superbank cut its three-year rate to 8.10%.

Following on from the recent cut to its three-year rate, which led the pack, last week National Bank lowered its two- and four- year fixed rates to 8.15% and 8.00% respectively.

Non-bank lenders to lower rates over the week included PSIS, which dropped its two-, three- and four- years and the Public Trust (two and three years) and SBS (three years).

General Finance and Cairns Lockie put up their two- and five-year rates. It will be interesting to see if RBNZ Governor Alan Bollard makes any comment on the fixed rate mortgage cuts or the housing market in general on Thursday.

The latest ASB Bank quarterly investor confidence report shows a net 16% of those surveyed expect the return from investments to be better than year than in 2005.

When asked what kind of investment gives the best return, residential rental property remains the asset class that is most widely expected to provide the best return over an indeterminate horizon.

This is another example of the uphill battle the Reserve Bank has in changing Kiwi attitudes to housing debt.

Variable rates still range from the 8.50% offered by Napier Building Society to the 9.75% recorded by Headstart.

One-year rates remain between the 7.6% offered by Southern Cross to 9.1% from GEM Home Loans.

Two-year fixed terms continue to be stacked between the 7.75% offered by Southern Cross to 9.25% from Headstart.

Three-year rates now start at Kiwibank’s 7.7% but still end with Headstart’s 9.15%.

Four-year fixed rates are still hemmed in a narrow range between the 7.95% offered by Loan Plan and now Kiwibank to the 8.35% from Pioneer.

In the five-year part of the market, rates continue to vary from 7.8% offered by Kiwibank and Mortgage Finance to Gem Home Loans’ 8.65%.

« Economists expect no change in OCR this weekOCR unchanged at 7.25% »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 2.79 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.39 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 4.40 2.95 2.95 3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 2.79 ▼2.79 3.39
The Co-operative Bank - Standard 4.40 3.29 ▼3.29 3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 3 June 2020 3:56pm

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