Bank of New Zealand is again dominating the market with its Unbeatable campaign that has a two-year rate of 7.60%.
But as we pointed out last week, this isn’t the cheapest two-year rate in the market. Bank Direct, HSBC and Loan Plan offer lower standard rates, Kiwibank, TSB and PSIS match BNZ, and a number of lenders such as Wizard have specials that are cheaper than BNZ.
One of the more surprising developments last week was that Westpac, the bank that didn't really want to play the price war game last year, has lowered its one year and 18 month rates. Its new one-year rate is down five basis points to 7.75%, and its 18-month rate is down one whole point (not really sure if that does count as a cut) from 7.70% to 7.69%.
Also Superbank went against the bank trend and increased all its fixed rates last week. To date the ANZ and National Bank have not yet budged in the price war.
Large lenders to cut their rates last week included ASB Bank and its sister company Sovereign.
Non-bank lenders to increase fixed rates last week include: Asteron, GEM Home Loans, NZ Finance, NZ Mortgage Funds, Premier, PSIS, SMC and Wizard.
The other development during the week was the release of a six-month rate by General Finance. The rate, of 7.40%, is described as “hot”, but in fairness there are not a lot of lenders offering six-month rates. The majority of mortgages written at the moment are for two years.
Looking ahead the focus this week is on what the Reserve Bank does with the Official Cash Rate.
Economists are divided on whether it will rise or not. A rise of 25 basis points will see floating rates move up from 8.75% to 9%.
Standard two-year rates currently range from 7.50% to 8.54%, and three-year rates go from a low of 7.60% to 8.50%.
To compare home loan rates go to click here
