ANZ has followed BNZ and Westpac in ditching their sub-4% mortgage rate offer.
ANZ had a 3.95% rate offer for a one year fixed term and that has now been replaced with a +10 bps higher rate of 4.05%, still a ‘special’.
But this has been balanced by two other changes.
First, it has added a new 18 month ‘special’, pitching it at 4.19% which interestingly is the best bank rate for this term other than HSBC’s 3.85% rate (and matching TSB’s similar offer).
And secondly, they have extended their cashback incentive out to Thursday, December 20, 2018. This is an up to $3,000 enticement for loans of $200,000 or more, conditional on you maintaining all you banking and home borrowing with ANZ for three years. It’s a payment for your exclusivity.
Earlier in the day, BNZ and Westpac also raised sub-4% rates to above that threshhhold. That leaves HSBC, ASB, SBS Bank and TSB as the remaining banks with sub-4% offers still available.
These changes come even though wholesale swap rates for one year have been stable for 5 months, and two year swap rate has fallen -10 bps in the past month (although today’s level is +10 bps above the general level over the past four months).
Retail term deposit rates, the main source of bank funding, aren’t moving either. (Although BNZ did take the opportunity today to reduce its RapidSaver bonus saver product by -10 bps.)
These changes are probably a signal that the imperative to be in the market with low rates is lower as the Spring house selling season draws to a close. And the great bulk of the loan rollover end-of-year surge has now passed, so the pressure from that source has lessened too.
The main feature of the competitive rate profile is how bunched the main banks are around the same rate especially for some key terms. A few challenger banks are trying to find pricing points that give them a profile difference, but the main banks are clearly trying to avoid advertised carded rate competition, preferring to respond to customers only when pressed on individual deals.
The latest margin data shows this remains stable, with BNZ and Westpac having the lowest net interest margin of 2.1%, ANZ and Kiwibank stable at 2.2% and ASB the highest at 2.3%. The net interest margin measures the difference between the interest earned from customers, less the interest rate banks paid to depositors and lenders, as a percentage of average interest-earning assets.
See all banks’ carded, or advertised, home loan interest rates here.
Here is the full snapshot of the fixed-term rates on offer from the key retail banks.
|below 80% LVR||6 mths||1 yr||18 mth||2 yrs||3 yrs||4 yrs||5 yrs|
|as at November 30, 2018||%||%||%||%||%||%||%|
In addition to the above table, BNZ has a fixed seven year rate of 5.95%.
And TSB still has a 10-year fixed rate of 6.20%.