Good Returns Weekly Home Loan Report
Home loan wars - Round 3
The Bank of New Zealand has resumed its discounting campaign with home loans, this time extending it to include three-year rates as well as two-year rates.
Since it announced its campaign on Friday night none of the lenders in the market have reacted.
However two other banks, ANZ and National, had earlier in the week rolled out some far more targeted campaigns.
The National Bank has a special 27-month fixed home loan rate of 7.60% for new and existing customers with total home lending more than $300,000.
"The fixed rate offer is designed to support both existing and new to bank home loan business where lending is greater than $300,000 and offers customers the benefits of a very competitive rate, over a term longer than two years," the bank says.
Earlier ANZ replaced its 18-month rate with a 20-month rate that is priced just under its two-year rate at 7.69%.
Meanwhile BNZ is offering two and three year rates at 7.55% under the Classic Home Loan banner.
Its standard rates for these two terms are 7.80% each.
One of the key differences is that BNZ's "cheap rates" have no other offers or incentives attached while the higher ones include FlyBuys and Global Plus Home Loans which attract loyalty card reward points.
Besides offering some lower rates BNZ is also promising to beat rates offered by the other big banks. However it is explicitly excluding ASB Bank's online subsidiary.
Bank of New Zealand says the three-year offer is being made because of "shifts in the interest rate cycle" and more people are starting to fix for this period of time.
However, as www.goodreturns.co.nz has been reporting in its Weekly Home Loan reports for some time most lenders have been reducing their longer-term home loan rates over the past couple of weeks.
This trend continued in the past week with a number of lenders including Asteron, Cairns Lockie, General Finance, GEM Home Loans, Loan Plan, Pacific Home Loans and Premier all reducing rates.
Three year rates currently range from BNZ's 7.55% up to NZ Mortgage Funds 8.25%. Most of the banks, including BNZ have three-year rates of 7.80% and there are a dozen lenders with rates between 7.55% and 7.80%.
Five year rates range from Kiwibank's 7.50% up to NZ Mortgage Funds' 8.21%. Like the three-year market most of the rates are around the 7.80% mark.
While NZ Mortgage Funds has some of the highest fixed rates in the market conversely it has one of the lowest floating rates.
To compare home loan rates go to www.goodreturns. co.nz/section/200.html