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Last Article Uploaded: Tuesday, November 30th, 7:17PM

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TSB looks to have avoided Kiwibank's rate promise problems

TSB appears to have sidestepped any legal pitfalls in its so-called 'rate beat’ offer on home loans.

Friday, October 29th 2021, 6:00AM

by Eric Frykberg

Under that offer, TSB pledged to beat any nationally advertised mortgage with a fixed interest rate that was offered by any of the big four Australian-owned banks.

A similar offer in the early 2000s landed Kiwibank in hot water with the Commerce Commission. 

But this time around appears to be different.  The commission says it has had no complaints about the TSB offer and has not undertaken any investigation.  

TSB said it was taking last year's 'rate match' pledge a stage further.  It would offer a mortgage 0.05% below any fixed, nationally advertised offer from the four big Australian-owned banks, ANZ, ASB, BNZ or Westpac. 

This was subject to the borrower meeting TSB's normal lending suitability and affordability criteria.

In 2002, Kiwibank made a similar offer, leading to a complaint of misleading advertising from another lender.  

In 2003, the Commerce Commission basically upheld the complaint. 

It said Kiwibank's advertising was liable to mislead, because it suggested it would undercut any lender.  But in fact, the offer only applied to banks with branches nationwide.

Kiwibank then agreed to change its advertising.  

In light of this, TMM asked the Commerce Commission for a view on the TSB offer.

In response, the Commission said it couldn't comment on this without conducting an investigation, and this had not happened.    

“To date we have not received any complaints about TSB's interest rate beat promise, and we have not opened an investigation into this matter.”

It appears that TSB has specifically averted Kiwibank's troubles by limiting its offer to the big four Australian banks. This leaves large numbers of small, non-bank lenders out of the picture.  

It was one of these small non-bank lenders that filed the complaint about Kiwibank with the commission. 

Asked to comment on this, TSB reiterated that its current home loan campaign beats any ANZ, ASB, BNZ or Westpac nationally advertised fixed home loan rate by 5 basis points, subject to lending criteria and terms and conditions.

“This campaign allows borrowers to clearly understand that TSB will beat those rates by 0.05% so that home buyers can make informed choices,” the bank said in a statement. 

“It differs from campaigns run in the past by other lenders which claimed to have the cheapest home loans in the market but only provided a rate match.”

Tags: commerce commission TSB

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.65 4.35 4.69
ANZ ▲4.79 4.25 4.95 5.35
ANZ Blueprint to Build ▲2.03 - - -
ANZ Special - 3.65 4.35 4.75
ASB Back My Build 2.04 - - -
ASB Bank 4.45 3.65 4.35 4.69
Avanti Finance 4.55 - - -
Basecorp Finance 5.49 - - -
Bluestone 3.74 3.54 3.89 4.09
BNZ - Classic - 3.65 4.35 4.69
BNZ - Mortgage One 5.15 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Rapid Repay ▲4.95 - - -
BNZ - Std, FlyBuys ▲4.95 4.25 4.95 5.29
BNZ - TotalMoney ▲4.95 - - -
CFML Loans 5.15 - - -
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 - - -
First Credit Union Special 5.85 3.59 4.09 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 5.25 4.00 4.60 -
HSBC Premier 4.49 2.19 2.45 2.69
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 4.15 3.29 3.85 4.19
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank ▲4.25 ▲4.54 ▲5.20 ▲5.54
Kiwibank - Offset ▲4.25 - - -
Kiwibank Special ▲4.25 ▲3.69 ▲4.35 ▲4.69
Liberty 4.84 - - -
Nelson Building Society 4.95 ▲4.29 ▲4.85 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.39 3.54 3.89 4.09
SBS Bank 4.79 3.65 4.19 4.25
SBS Bank Special - 3.15 3.69 3.75
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 3.29 - -
The Co-operative Bank - Owner Occ ▲4.75 3.49 4.15 4.49
The Co-operative Bank - Standard ▲4.75 3.99 4.65 4.99
TSB Bank 5.34 4.09 4.74 4.99
TSB Special 4.54 3.29 3.94 4.19
Unity 5.65 4.15 4.60 -
Wairarapa Building Society 4.99 3.55 3.89 -
Lender Flt 1yr 2yr 3yr
Westpac ▲5.09 4.25 4.95 5.29
Westpac - Offset ▲5.09 - - -
Westpac Special - 3.65 4.35 4.69
Median 4.77 3.65 4.35 4.69

Last updated: 30 November 2021 11:15am

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