The Red Bank heaps competitive pressure on ANZ by cutting some longer carded fixed rates, after ANZ raised all its fixed rates in early June
Westpac has announced cuts to its fixed home loan rates for terms 3 to five years.
They already had a low two year rate of 5.19% which is matched by BNZ.
This change now means they have the lowest carded rates for all terms from 2 years to five years of any of the main banks. But for the ever-popular one year and 18 month rates, Westpac is still slightly off the pace..
Interestingly, these Westpac reductions are exposing the June 3 hikes by ANZ. No-one followed ANZ, so there is likely to be a reassessment going on at New Zealand’s larges mortgage lender.
Financial markets are signaling that the RBNZ is expected to raise the OCR over the coming year, so these longer term fixed rate cuts may find borrowers willing to look at their options to lock in ‘lower rates’ when they are available. The OCR is currently 2.25% and markets expect it to rise by almost +100 bps by this time next year.
At the same time, Westpac has cut its 3, 4 and 5 year term deposit rates and by similar amounts. But savers are likely to yawn because these are not terms favoured by savers. However it does indicate that shorter term rates will be vulnerable if banks start cutting shorter term TD rates.
To compare mortgage rate offers in a way that includes the application and account fees costs, (or break fee costs if you need to do that), and applying the impact of a cashback/legal fee reimbursement, or other incentives, you can use our home loan comparison calculator. You can find it here. Or, for convenience, we have added it to the bottom of this article.
Negotiate, (even with your mortgage broker). How flexible banks may be will depend on the strength of your financials.
One other useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is here.
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. Break fees will be minimal in a rising market.
Here is the snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.
