Battle for borrowers business continues

Lenders lowering rates numbered well into the teens for two, three, four and five-year loans.

When added to the previous week's high count of decreases, it has been a hectic fortnight with few lenders standing back from the downward revisions.

Many changes were five or 10 basis points, but some were more significant, even at the shorter end of the market.

ANZ and National Bank cut 20 basis points off five-year rates and HSBC announcing decent decreases across the board.

Then this week began with Kiwibank and Westpac acting aggressively.

Kiwibank lowered all rates from six months to four years, with the largest cut being a 20-basis-point reduction to its one-year rate.

Westpac took the axe to all its rates, with the biggest change being a 35-basis-point lowering of its six-month rate.

Many non-bank lenders cut rates across the board, continuing the momentum of recent weeks of competition.

The first of the banks' disclosure documents for the December quarter are filtering through, but the impact this fixed rate contest will have on lenders' market share won't be clear until May and June, when the March quarter disclosure documents are made public.

Variable rates still start at the 8.50% offered by Napier Building Society and spread to the 9.75% recorded by Headstart. The major banks are stacked at the 9.55% level.

The range of one-year rates is now between the 7.60% offered by Southern Cross to 9.05% from GEM Home Loans.

Two-year fixed terms remain between the 7.75% offered by Southern Cross to 9.25% from Headstart, but there were 15 decreases over the week.

Three-year rates now vary between the 7.50% offered by Kiwibank to Headstart's 9.15%. Sixteen lenders cut their rates.

In the four-year part of the market, Pacific Prime and Superbank offer the lowest rate of 7.8%. The lenders are narrowly spread up to 8.10% from NZ Finance. There were 11 rate cuts.

For five years, rates now differ between the 7.45% offered by NZ Home Loans and Sovereign to Gem Home Loans' 8.45%. There were 13 rate decreases.

To compare mortgage rates visit the Good Returns Mortgage Centre http://www.goodreturns.co.nz/section/2.html

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