Home loan rates of 7% are now approaching

Mortgage rates of 7% are imminent.

ANZ, New Zealand’s largest housing lender, raised its five-year fixed rate by +50 basis points to 6.95% in a sweeping change to its rate card.

All of ANZ’s new fixed rates are now the highest in the market.

The bank no longer has any card offers below 5%.

Its new “special” one-year fixed rate is 5.35%, also a jump of +50 basis points.

The new “special” two-year fixed rate is 5.80% and an increase of +45 basis points.

The new three-year fixed rate “special” is 5.99% and up +34 basis points.

At these new levels, ANZ has put considerable distance between itself and its main rivals, space that these rivals will most likely soon occupy.

The increases come after sustained pressure on wholesale swap rates, but also as wholesale markets wavered on Monday, a wavering that has now extended into the past four trading days.

Ironically, this move by ANZ covered the Co-operative Bank’s misguided giant rate hike earlier today, one which the Co-op Bank has now corrected. If the major banks all align with ANZ, the Co-operative Bank’s new rates could actually look attractive to borrowers who are about to reprice.

Re-fixing is now where the mortgage market is focusing. These refinance (refinance) transactions look most attractive to banks when the underlying real estate transaction activity goes into hibernation, as it is now.

In addition to pushing mortgage rates aggressively, ANZ also sharply raised term deposit (TD) rates. We’ll have more on those changes separately, but you should know that ANZ’s new six-month TD rate was raised by +25 basis points to 2.75% and its one-year TD rate was raised by + 50 basis points at 3.65% per annum. On the very long term (and not very popular), they now offer 4.10% per annum for three years, 4.30% for four years and 4.40% for a five-year fixed term deposit.

A helpful way to make sense of these home loan rate changes is to use our full function mortgage calculator which is also below. (Term deposit rates can be estimated using this calculator).

And if you already have a fixed-term mortgage that is not up for renewal right now, our break cost calculator can help you assess your options. But break fees should be minimal in a rising market.

Here is the updated overview of the lowest advertised fixed term mortgage rates currently offered by major retail banks.

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Complete Mortgage Calculator

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