As of this Monday (18th November), Kiwibank are dropping their one-year rate to 3.39% and increasing to their two-year fixed rate to 3.55%.
This is an interesting move, especially when compared to the approach of SBS who still lead the banks with 3.39% for two years.
It looks like Kiwibank are the first to make this shift in strategy, where the one-year fixed rate is lower than the two-year rate and we expect to see the other ‘big five banks’ follow suit in the lead up to Christmas. This may also be an indication of banks predicting a slight increase in rates going forward. For now, 3.39% is the lowest amongst the top 5 banks.
We saw the wholesale swap rate shoot up significantly across the board after the Official Cash Rate announcement, before settling down again the following day. It's still sitting higher than what it was before the announcement, and what it does in the next week will give us a better idea of what rates may be doing going forward.
Stay tuned.