This time it's 4.99% for six-month fixed mortgages – its earlier special was for one year at that rate. As with the previous special, the offer is open only to those with at least 30% equity.
Unlike the first special, the latest offer is clearly not in response to further falls in wholesale interest rates – in fact, wholesale rates have risen.
Doug Steel at Bank of New Zealand says since the end of May bank-bill futures have risen about 42 basis points from 2.35% to 2.77% while the one-year swap rate – both benchmarks for pricing mortgages – has risen 39 points to 2.67%.
Kiwibank spokesman Bruce Thompson describes the latest special as “a marketing promotion. The last promotion was successful for us and we're looking to maintain momentum.”
Retail term deposits have become a much more significant part of bank funding over the last few years and Kiwibank has cut the amount it is offering on six-month deposits from 4.5% to 4.25%, effective from June 18. That's in line with what ASB Bank and Bank of New Zealand are offering for six month terms while ANZ National Bank and Westpac are offering 4%.
While much of the mortgage rate-cutting occurred in May, brokers report little let-up in market activity. Charlie Reid at Mortgage Link says his firm's advisers have seen “a significant upswing” which hasn't been limited to hot spots such as
Auckland and Christchurch but which is being experienced across the country.
Jac Lockington at Prosper Group in Blenheim says she's still very busy and most banks are still very competitive.
Bruce Patten at Loan Market in Auckland says while activity levels remain high, the purchase rate of houses has dropped because of the well-publicised shortage of listings of houses available for sale.
Patten says he's reviewed 26 loan pre-approvals today compared to a more normal level of four or five. “People can't find properties so the pre-approvals are banking up,” Patten says. “The pipeline is absolutely chocker and there's not as much falling out the bottom as we would like because people can't find (houses to buy).”
