ANZ Bank is turning up the competitive pressure in the mortgage market by offering a one-year fixed rate home loan at 6.95% for loans drawn down by 20 December.
"Having had a strong winter the property market is now booming and playing a big support role in the New Zealand economy. It is soon to get another shot in the arm as the traditional spring buying season gets underway," ANZ says.
Its one-year rate was previously 7.2%, in line with three of the other five major home lenders. WestpacTrust’s is 7.15% and Bank of New Zealand’s is 7.19%.
ANZ’s new rate matches Kiwibank’s 6.95% floating rate and is higher than its current 7.05% one-year fixed rate. ANZ’s standard floating rate is still 7.85%, although it is also offering a "no frills" floating rate loan at 7.25% plus a further $10 a month.
ANZ’s head of mortgage marketing, Annette Sloan, acknowledges some of her bank’s customers are making enquiries of Kiwibank but "we’re in the main retaining their business. We’re quite determined to retain our customers and not lose them on price," she says.
ANZ’s treasury department view is that funding costs for the one-year offer should be stable through to the end of the year. The wholesale one-year swap rate is currently about 5.86%.
"The rationale behind our rate is that we need to be more competitive in the mortgage market than we have been. We haven’t been taking the share of new business that we would like to," Sloan says. "In this key home buying season, we want to have an offer to encourage customers to choose ANZ."
Other bells and whistles attached to the one-year offer are no approval fees for all loans over $100,000, $600 towards legal costs for all loans over $100,000 and a $1,000 contribution for loans over $400,000 and a chance to go into a draw to win a Toyota.
