BNZ, announced on Friday night, that it is now offering a three year fixed rate at 6.99% - significantly below its competitors. The two and three year rates are available on the standard, tailored, and Fly Buys Home loans as well as the Ultimate Home Loan package that is a combination of fixed and floating.
The rate is not available on GlobalPlus Home Loans or any other packaged offers, where the applicable 2-year rate is 7.30% and applicable 3-year rate is 7.50%.
"BNZ set the pace for the two-year fixed home loans," general manager of business development Andrew Whitechurch says. "Now we're offering a market-leading home loan rate for three-year fixed home loans as well."
Aside from BNZ's activity on Friday last week was noticeably quiet in the lead up to the Reserve Bank's Official Cash Rate announcement with no significant changes being made.
The RBNZ left the OCR at 5.25% on Thursday. Following the announcement there have been some tentative moves downwards. Cairns Lockie/eMortgage, General Finance and Wizard all dropped fixed rates.
While BNZ has been leading the way in the two and three year markets, there are also some pretty sharp one-year rates on offer at present. The latest lender to move in his market is HSBC which is offering a special one-year rate of 6.55%. (Standard HSBC one year rate is 7.00%).
What's the best deal at the moment? There seems to be little doubt that two-year fixed rates are highly attractive.
"Two year rates are a bargain," ASB Bank economist Anthony Byett says.
"They're good rates and they're a good insurance policy."
He says this as medium and long-term rates are driven off what is happening in United States economy. Once the jobs start coming through in that country then the Federal Reserve will start increasing rates.
Byett says the New Zealand market will be watching the Federal Reserve's meeting Wednesday (Tuesday US time) to see what chairman Alan Greenspan has to say about the job market.
