Economists have been expecting a rise in fixed mortgage rates, however lenders have thrown in a curve ball this week with 12lenders making cuts.
Kiwibank put pressure on the major banks today by dropping its one year rate by 10 basis points to 6.15% which is the lowest rate for banks alongside National Bank. HSBC may have an even lower rate of 5.99% but it also has eligibility criteria that you must have at all times a minimum value of $500,000 in loans with HSBC or a minimum value of $100,000 in savings and investments.
TSB Bank started the week off by making its two year-rate the lowest for all lenders after a six basis point (bp) cut to 7.09%. TSB also dropped its four-year rate by 30 bps to 8.20% and its five-year rate fell 15 bps to 8.50% with both now in line with the median for banks.
ASB, BankDirect and Sovereign also made welcome reductions to its longer term fixed rates. All three lenders dropped their 18-month terms by 35 basis points, two-year rates were cut 45 points and three-year rates went down by 25. NZ Home Loans made the same adjustments to its two and three-year rates.
ASB and BankDirect's three-year rates are now the lowest at 7.70% alongside PSIS which also cut its three year rate as well as its four year rate to 8.20% which is the lowest rate for non-bank lenders.
SBS Bank has made cuts to all its fixed term rates of one-year or more bringing them into line with the medians for minor banks. Its biggest reduction was made to its five-year rate of 25 bps followed by a 15 bps cut to its three-year rate, 10 bps off its two-year rate and its one-year dropped by 4 bps to 6.25%.
Hawkes Bay-based lender HBS reduced its floating rate by a hefty 59 bps from 6.49% to 5.90% making it a more competitive rate alongside all lenders.
It also cut its three year rate by 19 bps from 7.99% to 7.80% and its four and five-year rates were reduced by 25 bps to 8.25% and 8.50% respectively. Its five year rate is now the lowest for non-bank lenders.
Credit Union Baywide took a 45 bp slice out of its two-year rate this morning to 7.25% and cut its three-year rate by 25 points to 7.85%.
AMP changed its three, four and five year rates to 7.75%, 8.20% and 8.50% and Credit Union North has cut its three-year rate by 35 points to 7.75%.