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Sub 4% rates unlikely to return

ASB has joined its major rivals and bumped its fixed one year rate to more than 4%, and advisers predict sub 4% rates are unlikely to return any time soon.

Thursday, December 6th 2018, 3:35PM

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.”

Tags: ANZ ASB BNZ Westpac

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 ▼2.93 ▼3.07 ▼3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.45 2.99 3.35
SBS Bank 4.54 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.05 3.13 3.12

Last updated: 13 August 2020 2:59pm

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