Bruce Patten
Bruce Patten
ASB has shifted its one year special rate to 4.05% after it slashed rates at the end of November, joining the likes of Westpac, ANZ and BNZ below 4% last month.
The big four have all moved their one year rates up following the short-lived price war.
November’s cut price frenzy led to an uptick in business for some advisers as customers refinanced and slashed rates, but advisers think another sub 4% price war is unlikely.
Kris Pedersen, the boss of Kris Pedersen mortgages, said: “I think it was a bit of a special situation, potentially coming on the back of the bank conduct discussions.
Pedersen added: “Where the term deposit rates are in the 6-12 month space suggests that continuing to offer mortgage rates at that level is probably unsustainable, unless we see the TD rates decrease also.”
Bruce Patten, head of growth at NZFSG, said the moves up to 4% were “expected”. He added: “I don’t expect to see them back.”
Property experts say the sub 4% rates were driven by the need to grab prime customers. Kelvin Davidson, Senior Research Analyst at CoreLogic, said: “It seemed to be about banks competing fiercely for the limited/fixed pool of “good” borrowers who have the deposit, can satisfy the stringent income and expense tests, as well as would be able to service the mortgage at a theoretical rate as high as 8%.”
Davidson expects the impact of rates shifting back to more normal levels will be “marginal”, “mostly because the impact when they went below 4% was arguably pretty small”. He added: “From that limited pool, I doubt that there was a torrent of new borrowers pulled in, so I can’t imagine the reverse will now happen.”
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