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  • http://www.nzherald.co.nz/business/n...ectid=10807790

    BNZ joins mortgage rate war
    8:00 AM Wednesday May 23, 2012
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    BNZ has joined the other main banks and cut its fixed mortgage rates. Photo / File
    BNZ has cut most of its fixed mortgage rates this morning, bringing its rates into line with cuts by other banks in the last two weeks.

    There has been slump of around 50-80 basis points in wholesale interest rates rates in the last six weeks as fears about the European debt crisis hit expectations for growth and inflation globally.

    Also, bank profit margins have risen around 40 basis points in the last two years because of a massive shift in customers from less profitable fixed mortgage rates to more profitable floating rates. Banks are now in a much more competitive mood thanks to these bolstered profit margins and a surfeit of cash on their now much stronger balance sheets.

    They are also trying to fire up profit growth through increased lending, given annual lending growth has slumped from 10-15 per cent through the mid-2000s to 2 per cent in 2012.

    BNZ already had the lowest 18 month mortgage rate of 5.10 per cent, but this morning it cut its 1 year rate by 50 basis points to 5.25 per cent and cut its 2 year rate by 24 basis points to 5.65 per cent.

    It cut its 3 year rate by 40 basis points to 5.75 per cent, its 4 year rate by 40 basis points to 6.10 per cent and its 5 year rate by 40 basis points to 6.50 per cent.


    BNZ's 1 to 5 year rates are in line with the other major banks.

    BNZ also slashed its 7 year fixed mortgage rate by 56 basis points to 6.99 per cent. It is the only major bank offering a 7 year fixed mortgage rate. It left its 6 month mortgage rate unchanged at 5.75 per cent.

    Kiwibank kicked off the rate cutting frenzy on April 26 when it offered 4.99 per cent for a 1 year mortgage rate to customers with 30 per cent equity in their homes.

    ANZ and its sister bank National then cut its one year rate to 5.25 per cent on May 9 and its competitors have been cutting back and forth since then.

    None of the banks have yet to cut their advertised floating mortgage rates yet from around 5.7 per cent, although many are offering special deals of around 5.3 per cent to customers with strong equity who ask or threaten to jump to another bank.
    Patience is a virtue.

    Comment


    • AS IO posted else where in the forum: I suspect that the negative rela interest rates in Europe and America are making finance easier to find for NZ banks. If that is correct then NZ may well see the current "low" interest rates for two more years at least. You will recall that prior to GFC the reserve bank was complaining that controlling the OCR was having little effect due to cheap foreign funds. They may well find that they should have kept looking for another mechanism to control the economy.
      The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.

      Comment


      • Originally posted by drelly View Post
        I've been talking wth my personal banker at Westpac and she has magnanimously returned with a 0.75% discount from their over-inflated standard rate. I think I'm going to have to wait a while to compose my reply!
        is that over the fixed or floating? I am having a chat with my personal banker at 1 today to have a wee chat about this.

        Comment


        • let us know how you get on Wayne, my one still hasn't returned my phone call

          Comment


          • Originally posted by Wayne View Post
            is that over the fixed or floating? I am having a chat with my personal banker at 1 today to have a wee chat about this.
            Floating rate
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            • I have the impression that Interest rates will stay low ( for NZ)for at least another 12 months and quite possibly 2-3 years. I have voiced the reasons before but to recap: in Europe and America deposits are returning less than the inflation rate. So money will most likely move to regions that provide an above CPI return NZ and Aussi. This may well have a negative,for NZ, effect on the exchange rate meaning the risk is the NZ dollar will stay high. It will be interesting to see what happens when northern hemisphere interest rates move into positive territory . There may well be pressure on NZ interest rates( ie: pushing them higher) but the exchange rate may drop at the same time either making money even more expensive( hedging costs) or perhaps even contrarily moderating any NZ interest rate rises.
              The mission of any business enterprise should include the aim to develop economic conditions rather than simply react to them.

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              • got the floating rate down to 5.24% (1% off their odd Choices Floating and matches ANZ) but my banker couldn't move on fixed rates as far as ANZ. ANZ offered 0.5% off without me asking (for a recent purchase) but the best Westpac will do is 0.25% (their 'standard' is 0.2%) so I took what I could get (can't change to ANZ unless I change them all to ANZ (they are a little intertwined). All good really :-)

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                • Woody Allen's quote "eighty percent of success is showing up" - rang true for me last week when I made the phone to the lender (BankDirect) and asked for a better deal. I have been following the success of investors here and its great to see its working a treat..the lenders are coming to the party so to speak. Thanks to Bernard Hickey for suggesting the action aye.

                  cheers,

                  Donna
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                  • Make sure you keep checking in future too as they have a nasty habit of removing the discount without any notification!
                    Last edited by Perry; 06-06-2012, 07:08 PM.
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                    • TSB rate down to 5.3%
                      Patience is a virtue.

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                      • So wasnt happy with my first rate drop so hit them up for a second since everyone else was getting better rates. My floating rate has been dropped to 5.39 with a .35% discount off the floating rate for the term of the loan.

                        Am going to make some enquires into my PPOR which is fixed at 6.2% until August next year and see if A) current bank will drop rate or B) another bank will cover my costs.
                        Last edited by Maccachic; 11-06-2012, 01:16 PM.

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                        • Just drew down last week,

                          5.25 Floating
                          5.4 R/C Facility

                          Got another one coming off fixed in Jan so hope things stay competitive!

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                          • Are interest rates on the way up?

                            Both BNZ and Westpac have raised their 18mth rates today.
                            "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                            • Westpac have raised their 4yr rates tonite.
                              "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

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                              • http://www.interest.co.nz/charts/int...tes/swap-rates

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