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Mortgages

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BNZ reckons it's the winner

Bank of New Zealand is the clear winner in the mortgage market price war, even though its market share hasn't budged in the last year, according to managing director Peter Thodey.

Friday, May 12th 2006, 1:17AM

by Jenny Ruth

He puts his bank's share of the mortgage market at 16.2%, based on Reserve Bank figures, unchanged from a year ago.

"What we've always said is that we want to write profitable business. That's what we've done," Thodey says.

"We write about 25% of all the non-broker business. Because the average duration is two-year fixed, our competitors are paying away their margins to brokers," he says.

BNZ hasn't dealt with mortgage brokers since 2003, although its share of broker originated business before that was minimal.

The bank kicked off its "Unbeatable" campaign, credited with starting the current price war, in November 2004.

"If we can increase market share, we will, but we're not going to do it at the cost of profitability."

Thodey says although BNZ's competitors' published rates are higher than BNZ's, they are in fact matching his bank. "They also pay brokers. There can only be one winner in all that and it happens to be us."

While BNZ's interest margin has declined eight basis points, the published results of ANZ/National Bank puts its margin decline at 26 points and Westpac's at 25 points, he says.

BNZ's chief financial officer Mark Hosking says his bank participates in only 70% of the total mortgage market (brokers account for about 30%) so holding its market share steady means "you must be holding well above your market weight."

Thodey says mortgage market growth continues in double digits, against expectations that it would have slowed to 9% or 10% by now. "It's slowing, but much more gradually than anybody expected." He also expects general economic growth to be "not bad for New Zealand" at about 1.5%, or maybe as high as 2% over the next year.

BNZ reported a 7.6% rise in first-half net profit to $270 million. However, its second half net profit slipped to $131 million from $134 million in the previous second half and from $139 million in the first quarter.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.45 7.05 6.85
ANZ 8.64 7.99 7.49 7.35
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.39 6.89 6.75
ASB Bank 8.64 7.39 6.89 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.29 ▼6.85 ▼6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.95 7.65 7.45
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.15 - -
Co-operative Bank - Owner Occ 8.40 7.35 6.89 6.75
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.85 7.39 7.25
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.85 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.59 7.29
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.35 7.89 7.65
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.35 6.89 6.75
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.90 7.39 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.30 7.89 7.69
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.30 8.89 8.69
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.95 7.45 7.29
SBS Bank Special - 7.45 6.95 6.79
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 7.05 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.19 7.55 7.55
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.39 6.75 6.75
Unity 8.64 6.99 6.85 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 7.15 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.45 7.37 6.77

Last updated: 23 February 2024 11:59am

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