BNZ raises some key 'special' mortgage rates, cuts many 'standard' rates, as wholesale money costs head down to record lows

Despite falling swap rates, BNZ has today raised two of its three ‘special’ fixed mortgage rates.

It has raised its two year ‘special’ by +10 bps to 4.49%.

It has raised its three year ‘special by +15 bps to 4.64%. (yes, 4.64%.)

Its one year ‘special’ is unchanged at 4.39%.

But it has cut a range of standard fixed rates at the same time.

Its 18 month rate has been reduced from 5.09% to 4.99%, a -10 bps drop.

Its four year rate has also been reduced, down -15 bps to 5.25% from 5.40%.

Its five year standard rate is down -15 bps as well to 5.35% from 5.50%.

And its unique seven year fixed rate has benefited from a similar -15 bps reduction to 5.75%.

The result of these changes leaves BNZ with an unremarkable carded rate offering, except for their three year ‘special’.

Despite today’s +15 bps rise, its 4.64% rate is still the lowest carded three year rate among the main banks.

These changes come despite wholesale swap rates falling to record lows for terms 3 years and longer, and close to record lows for one and two years.

Risk spreads, which add to bank costs, are at high levels. Australasian corporate CDS spreads for investment grade debt, which is a proxy for these premiums, have risen lately, although in the US and Europe these spreads have been falling fast in the past few days. The other thing to remember about the Australasian index is that the corporates covered in that index include the Australian miners who will be distorting the index higher. Banks won’t be suffering the full weight of the spread rise.

Today, mortgage rates now compare across all banks as follows:

below 80% LVR  1 yr  18mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % %
4.39 4.95 4.49 5.10 5.25 5.35
ASB 4.39 4.49 4.49 4.75 5.15 5.25
4.39 4.99 4.49 4.64 5.25 5.35
Kiwibank 4.35   4.39 4.85 5.25 5.35
Westpac 4.39 4.95 4.49 4.80 5.25 5.35
             
4.39 4.39 4.49 4.75 4.99 5.15
HSBC 4.25 3.95 4.39 4.59 4.79 4.99
HSBC 4.35 4.35 4.35 4.65   5.29
4.35 4.69 4.29 4.79 5.35 5.35

In addition, BNZ has a fixed seven year rate of 5.75%, while TSB Bank offers a fixed ten year rate at 5.75%.

<!–

//–>