Kiwibank goes long

As is often the case it is an offer with strings attached. The main one is that a borrower has to have at least 30% equity in their property otherwise the rate is 6.79%.

As you can see here it is a clear market leader in the term, however not that many lenders offer four year rates.

The lowest four-year rate offered by another bank is the 6.70% on offer from both ASB and the Co-operative Bank, formerly PSIS.However, Public Trust is slightly more competitive.

Kiwibank spokesman Bruce Thompson said the bank traditionally likes to kick-start the year with a market-leading rate.

"Over the past couple of years, the competition has been for shorter term lending, but Kiwibank is now offering home owners the opportunity to lock-in a very low rate for a longer period," Thompson said.

"There is considerable uncertainty about interest rates and about the world economies, so this four-year offer gives customers certainty."

Comments from our readers

On 13 January 2012 at 12:26 pm Amused said:

Madness to lock in for 4 years at present at 5.99% p.a. when you can float with most banks currently at 5.39% p.a. (or less). The other added benefit of floating is having the flexibility to make additional repayments at your leisure without paying additional fees to do so. Bottom line there is no panic to fix at present and we'll get plenty of warning when fixed rates do start to move upwards again.

On 15 January 2012 at 9:48 am Perplexed said:

Not amused by amused. Not one bank on this website has a formal rate listed anywhere near 5.39%. What planet are you on?!

On 15 January 2012 at 9:56 pm Al said:

There will be very little warning before floating rates begin to rise. For mum and dad lenders there is little point speculating on rates, as they don't understand international debt markets and the indicators signalling a rate shock. Moral of the story, unless your a savy businessman with your finger on the pulse of markets, lock in your rate and term and relax.

On 16 January 2012 at 5:37 pm Amused said:

Talk to a mortgage broker or your local branch banker Perplexed. It's often a case with the banks of "you don't ask, and you don't get" There must be thousands of Kiwi's sitting on "carded" floating rates presently none the wiser of the discounts available to them. Quite sad really and the banks are laughing rest assured.

On 18 January 2012 at 12:09 pm Johnny said:

I happen to know of two clients offered a 5%-flat floating rate, in the last week. Haggle with your bank. Mind you Amused, nothing wrong with fixing at 5.99 for the bit you won't be paying off in the next 4 years is there?

On 18 January 2012 at 1:39 pm Amused said:

Yeah Johnny the discounts banks are able to offer clients on floating rates (when actually pushed) seem to be significant that’s for sure. 5.99% p.a. for 4 year money is a good rate don't get me wrong but we could conceivably see margins improve even more so on longer term rates in the months ahead. I'd feel a bit foolish locking in one of my clients now with this in mind. Again no hurry in my opinion to commit to a fixed rate (just yet).

Kiwibank has started the year by dropping its four year fixed home loan rate 80 basis points taking it to 5.99%.

Thursday, January 12th 2012, 7:21PM 6 Comments

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