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BNZ rate will get brokers' phones ringing

UPDATED A record low interest rate in the home loan market is likely to drive inquiries to brokers, it has been claimed.

Friday, September 4th 2015, 10:00AM

by Susan Edmunds

BNZ is from today offering a rate of 4.35% fixed for one year, to borrowers with 20% equity, their "everyday banking" and one other product with BNZ.

It was previously 4.59%.

The move has been tipped to be the first in this year's spring mortgage war.

Broker John Bolton, of Squirrel, said aggressive marketing offers such as the BNZ rate always encouraged broker inquiries.

“Low rates always drive activity, you get people asking whether they should break their loans.”

But he said because the rate was only available for one year, it would probably not be worth switching banks to get.

He said low advertised rates such as BNZ’s also risked giving borrowers the impression that rates were likely to continue to drop.

“Brokers need to be careful.  Generally speaking people view this as 'rates are on the way down again, I might as well stay floating', rather than simply the bank running an aggressive special.”

He said wholesale price movements did not support such low rates.

Bolton said brokers would need to focus on helping their clients find the right rates that would fit with their circumstances and the economic environment, rather than encouraging the mentality of trying to fix at the lowest point of the market.

Broker Glen McLeod said it was possible that rates could yet have further to fall. He said he would like to see an advertised rate as low as 3.99%.

Massey University banking expert David Tripe said that if predictions of a 2016 recovery in export prices proved correct,  five-year rates could be as low as they were going to get.

Jenny Campbell, chief executive of the Mortgage Supply Co, said borrowers needed to be aware if they wanted to break a fixed term to take up a special offer, they would often have to repay cash contributions as well as pay a break fee. 

She said mortgage advisers would have to help their clients work out what they would have to pay and whether such a move was worthwhile. "There are a lot of mortgage advisers running around at the moment trying to keep up with clients' inquiries."

The Official Cash Rate is to be reviewed on September 10. There are predictions it could drop from its current 3% to 2% by the end of the year.

The BNZ rate is available until September 20.

Tags: BNZ John Bolton Mortgage Rates

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.29 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.49 ▲2.89 ▲3.19
The Co-operative Bank - Standard 4.40 ▲2.99 ▲3.39 ▲3.69
TSB Bank 5.34 ▲3.30 ▲3.69 ▲4.04
TSB Special 4.54 ▲2.50 ▲2.89 ▲3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 19 July 2021 9:09am

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