Kiwibank has made a number of home loan interest rate changes, effective Friday February 3, including ending the short-term “special” four-year fixed rate..

The two year fixed rate has been reduced from 5.89% p.a. to 5.79% p.a.; the three year rate has been reduced from 6.39% p.a. to 6.10% p.a.; the four-year special of 5.99% p.a. finishes and the rate becomes a regular carded rate of 6.50% p.a. and the five year rate is reduced from 7.19% p.a. to 6.90% p.a..

With the euro zone crisis and concerns that the UK could face a second credit crunch it is looking all the more likely that mortgage lenders will look to raise their rates.

Although it seems that many lenders have been more competitive in recent months the amount of lending in the market has not increased and could therefore fall back further depending on how the euro zone pans out.

Therefore the trend for ever cheaper mortgage rates is on the turn, which points to rate changes.

Some analysts state that mortgage rates have been moving to and fro consistently over the last 12 months and therefore these are hardly revelations.

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For the first time in over a month, the Best-Execution rate for 30yr fixed mortgages rose from a rounded average of 3.875% to 4.00% today.  The underlying borrowing costs associated with 3.875% didn’t rise by a significantly painful amount, but the small increases across the board, combined with one huge move by a huge lender, was enough to bring the average rate closer to 4.0% than 3.875%.

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The deal Co-operative Bank is offering a five year fixed rate mortgage at 3.39 per cent.

The good points You can’t get a lower five year fixed rate at the moment. The nearest is and offering from Yorkshire building society at 3.59 per cent.

The bad points To qualify you’ll need to have a current account with the Co-op as well as a deposit of at least 25 per cent. If you have only a 15 per cent deposit, the rate climbs to 4.24 per cent. The application fee is steep at 999.

Conclusion The Co-op is currently offering 200 if you switch current accounts to it so, combined with this offer, that could be a powerful inducement. How

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Kiwibank is offering a limited time home loan rate of 4.99% p.a. fixed for six months.

Kiwibank Chief Executive Paul Brock said it is by far the lowest rate ever offered by the bank and significantly under cuts the other main banks.

“We’ve seized an opportunity to offer what we believe is a startlingly low home loan interest rate.

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