Retail interest rates on lending and deposits (B3)

The data: coverage, periodicity and timeliness

Coverage characteristics

Data are interest rates as at the last business day of the month. The survey covers all registered banks.

Data series being published (the longest running series beginning 1964) are weighted interest rates for:

• SME overdraft rate
• Floating first mortgage new customer housing rate
• Effective credit card rate on interest-bearing credit card debt
• Effective credit card rate on all credit card debt
• Six-month term deposit rate.

During the development of the new Bank Balance Sheet (BBS) collection in 2016/17, we identified data quality concerns around the published effective mortgage and business lending rates. With the retirement of the Standard Statistical Return (SSR), the following interest rates have not been updated since January 2017 and the following series are now discontinued.

• Business lending rate
• Effective floating mortgage rate
• Effective fixed mortgage rate
• Effective mortgage rate.

We now capture the actual interest income flows for loans fully secured by residential mortgage (both fixed and floating) and the actual interest income flows for loans for non-financial business not secured fully by residential mortgage, to enable the calculation of yields for these loans. The new series in web table B6 replaces the series previously published in this web table (B3). We have not added or ‘stitched’ the series together due to construction and underlying quality differences between the series.

All interest rates should be treated as indicative only.

For the call deposit rate and base lending rate, see Discontinued statistics

Periodicity

Monthly.

Timeliness

We publish five working days after the end of the reference period.

The following rates will generally be published with a one or two-month lag as they are compiled with other statistics that are released after the retail interest rate statistics:

• Effective credit card rate on interest-bearing credit card debt
• Effective credit card rate on all credit card debt.

Access by the public

Statistics release calendar

The statistics release calendar provides a long-term plan of scheduled releases. We update and release the calendar on the first working day of the month.

View the statistics release calendar

Integrity

Dissemination of terms and conditions under which official statistics are produced, including confidentiality of individual responses

We collect data under Section 36 of the Reserve Bank of New Zealand Act 1989 (the Act).

View the Reserve Bank of New Zealand Act 1989

We only publish aggregated data. Individual institutional data remains confidential.

Provision of information about revisions and advance notice of major changes in methodology

Provisional data are italicised. Data are deemed provisional when a series is under review. New data, or revised data, are in bold font. This applies to the summary table only and not Excel files. We generally publish revisions when we update and release the next table. Should we need to make revisions more promptly, we will post a special note on the website. We post any major changes in methodology on the website as a note.

Quality

Dissemination of documentation on methodology and sources used in preparing statistics

A list of registered banks is available.

Dissemination of statistics that support statistical cross-check and provide assurance of reasonableness

Most financial institutions either publicly display rates or make rates available upon request. National press and Interest.co.nz also publish a range of interest rates.

Business lending

SME overdraft rate

The small- to medium-sized enterprise (SME) overdraft rate is the base interest rate for new overdraft loans for SME non-farm enterprises. It is weighted by each surveyed institution’s share of the total value of overdraft lending subject to the business base rates offered.

The rate measures the set base rate component of the product offered to customers and does not include any margin component added to this rate, which is related mostly to individual borrowers’ credit risk. We previously published the SME overdraft rate under the name of Business Base Lending Rate (BBLR). The new name more accurately reflects the underlying loan products being surveyed. There is no change to the source data stemming from this name change.

House lending

Floating first mortgage new customer housing rate

The interest rate recorded here is the weighted average of the advertised (or ‘carded’) standard, floating (not fixed for a specific term) first mortgage interest rate banks offer to new borrowers for residential property. Any special rates or discounts offered to borrowers with conditions (for example, 30% equity) are excluded from the results. The rate up to February 2017 was weighted by each surveyed institution's share of floating mortgage loans from S8 Banks: Mortgage Lending of the Aggregate Registered Bank statistical return. From March 2017, the rate is weighted by each surveyed institution’s share of floating mortgage loans from Bank Assets – Loans fully secured by residential mortgage S33 of the Aggregate Registered Bank balance sheet return.

Please note we published the same floating interest rate source as a weighted average advertised rate for standard first mortgage interest rate borrowers in the B3 web table compared to a simple average in B20 – so the two rates will not necessarily align.

View S8 Banks: Mortgage Lending

View S33 Banks: Assets – Loans fully secured by residential mortgage

Credit card lending

Effective credit card rate on interest-bearing credit card debt

The effective credit card rate on interest-bearing credit card debt is a weighted average of the interest rates currently being paid on credit card debt that is incurring interest.

We source this rate from the Credit card statistics and publish with a two-month lag.

Effective credit card rate on all credit card debt

The effective credit card rate on all credit card debt is a weighted average of the interest rates currently being paid on all credit card debt. This rate includes both credit card debt that is incurring interest and credit card debt that does not incur interest (because it is paid off in full each month or is subject to an interest-free period).

We source this rate from the Credit card statistics and publish with a two-month lag.

Term deposits

Six-month term deposit rate

This rate is the advertised interest rate paid for a new six-month term deposit of $10,000. The rate up to February 2017 was weighted by each surveyed institution’s share of household deposits from S6 Household Credit of the Aggregate Registered Bank statistical return. From March 2017, the rate is weighted by each surveyed institutions share of interest bearing household deposits included in Banks: Liabilities – Deposits by sector – S40 of the Aggregate Registered Bank balance sheet return.

View S6: Household Credit

View S40: Banks: Liabilities – Deposits by sector

Old rates no longer being updated

Prior to the introduction of the new Bank Balance Sheet (BBS) collection in April 2017, we published monthly yield estimates (also known as ‘effective’ interest rates, as below) for mortgages and business lending in web table B3. During the development of the BBS, we identified data quality concerns around the quality of published effective mortgage and business lending rates. We have not updated these series since the retirement of the SSR in February 2017.

We have now completed an update to our bank Income Statement Survey (ISS) collection, which now captures the actual interest income flows for loans fully secured by residential mortgage (both fixed and floating) and the actual interest income flows for loans for non-financial business not secured fully by residential mortgage, to enable the calculation of yields for these loans. The new series in web table B6 replaces the series previously published in web table B3. We have not added or ‘stitched’ the series together due to construction and underlying quality differences between the series.

Business lending rate

The business lending rate is a Weighted Average Interest Rate (WAIR) for NZ resident business borrowing (including agriculture) from registered banks. The business lending rate was not surveyed directly, but was calculated as a residual from the existing monthly WAIR for all registered bank NZD claims, which was surveyed and published from June 1998 until January 2017.

To calculate the business lending rate, we identified these non-business lending categories:

• Housing and credit card lending totals comprise more than half of all NZD claims. WAIR are surveyed monthly for these series.
• WAIRs are estimated for five other loan categories that are not included in our aggregate business and agriculture loan totals (Table C5). These include lending to:
  • finance (both interbank and other finance)
  • insurance
  • government and defence (in effect, local authority claims)
  • other consumer loans
  • non-resident lending.

Estimation of WAIRs for the five listed categories draws on market prices for 90-day bills, two and three-year swap rates, published consumer loan interest rates, and our knowledge of market pricing practices. Given the nature of lending to these categories and their aggregate share of total NZD claims (around 10%), it is our view that the calculated business lending rate is not materially affected by the estimation process. Subtracting (1) surveyed housing and credit card loan WAIRs and (2) estimated WAIRs for the loan categories from the total NZD claims, WAIR delivers a calculated business lending rate as a residual WAIR.

Effective floating mortgage rate

The effective floating mortgage rate is a weighted average of the interest rates currently being paid across all floating rate mortgage loans. We calculate it as a function of the average floating mortgage loan balances and the interest receivable on those balances over the month. This rate differs from the floating first mortgage new customer housing rate as it accounts for discounts that may be applied to the advertised floating mortgage rate. These may include special offers and offset mortgage facilities. The effective floating mortgage rate was sourced from S8: Banks: Mortgage Lending of the Aggregate Registered Bank statistical return.

View S8 Banks: Mortgage Lending

Effective fixed mortgage rate

The effective fixed mortgage rate is a weighted average of the interest rates currently being paid across all fixed term mortgage loans. We calculate it as a function of the average fixed-term mortgage loan balances and the interest receivable on those balances over the month (see above formula). The effective fixed mortgage rate was sourced from S8: Banks: Mortgage Lending of the Aggregate Registered Bank statistical return.

View S8 Banks: Mortgage Lending

Effective mortgage rate

The effective mortgage rate is a weighted average of the interest rates currently being paid across all types of mortgage lending (floating and fixed). We calculate it as a function of the average mortgage loan balances and the interest receivable on those balances over the month (see above formula). The effective mortgage rate was sourced from S8: Banks: Mortgage Lending of the Aggregate Registered Bank statistical return.

View S8 Banks: Mortgage Lending

Symbols and conventions for summary table

General notes

• Individual figures may not sum to the totals due to rounding
• Percentage changes are calculated on unrounded numbers
• You are free to copy, distribute and adapt these statistics subject to the conditions listed on our copyright page.