The major move was BNZ, who once again upped the ante by announcing at the very end of last week it was dropping its rate another 20 basis points to 6.79%.
Interestingly enough no one has moved to match this rate.
However, during the week 12 lenders dropped their two-year rates.
The banks all dominate the low end of the market in this area, with HSBC, Kiwibank, TSB and Westpac all lowering their two-year rates during the week.
The exception amongst the banks is Westpac. It appears to be differentiating itself by having its two-year rate at 7.15% (20 basis points higher than its competitors), but cutting its hybrid rates, 18 months and 30 months to 6.85% and 6.99% respectively.
The only non-bank lender at 6.95% is PSIS, (which also dropped its six month rate this week).
The next group up in the two-year market is Sovereign and the organisations that sell its badged home loans (AA Financial, Public Trust, NZ Home Loans).
The other changes of note during the week were Kiwibank who lowered its three, four and five year rates, and four lenders dropped their one year rates.
The only rises during the week were from two trustee companies (Guardian Trust and Trustees Executors) who put up their floating rates. Guardian Trust also put its one-year rate.
What’s the best deal at the moment? Still it has to be the two-year rates from the banks.
“Going longer is too expensive given the increasingly benign floating rate outlook,” BNZ economist Tony Alexander says.
He says the markets are starting to focus on the March 11 Official Cash Rate announcement “for their next decent guide to where monetary policy may be headed.”
“There is a high expectation in the markets that the Reserve Bank will lift the cash rate another 0.25% to 5.5%. But just as the January 29 review produced a surprise tightening this one could produce a surprise absence of any change.”
“Our pick is that they will tighten – with 60% probability. It’s the move after that which is far more dubious.”
For a full list of rates click here
