NZ's biggest bank moves first – will rivals follow suit?
ANZ has kicked off one of the most aggressive cashback promotions in years, offering 1.5% of lending to new home-loan customers with at least 20% equity – a move advisers say could trigger a new round of competition among major lenders.
The offer runs until 16 December and follows ANZ chief executive Antonia Watson’s comments that the bank plans to regain mortgage market share lost over the past year, OneRoof reported.
The timing also coincides with softer economic conditions and expectations of more rate cuts. Kiwibank says falling mortgage rates – from 7.5% to the mid-4s – are easing pressure for many, though lower-spending households and retirees feel less relief with costs still rising above CPI.
Borrowers stand to gain up to $15,000
GV Financial Services director Gareth Veale said ANZ’s boosted cashback is highly attractive.
“If someone has a $1 million debt and they shift to ANZ, they get $15,000. That’s massive,” Veale said.
He said most clients could still come out ahead even after break fees.
For the typical $800,000 loan, ANZ’s cashback sits around $12,000, compared with $7,200 from other major lenders.
“It’s a bonus for people coming into Christmas. It’s bloody cool,” Veale said.
He expects competitors to respond soon.
Rate-cut expectations raise the stakes
Economists widely expect a 25-basis-point OCR cut next week, which banks are likely to pass through.
An ANZ spokesperson said cashback offers are designed to provide upfront support and help cover refinancing or moving costs.
Float Mortgages adviser Geoff Christopher said ANZ’s offer underscores the intensity of competition.
Christopher noted it will especially appeal to borrowers:
- floating or due to refix before Dec. 16
- with settlements in the coming weeks
But he warned cashback deals come with obligations: Anyone who tried to move banks sooner would usually have to repay all or at least some of the cashback.
Retention incentives remain much smaller at just 0.3-0.4%, Christopher said.
“Loyalty does not get rewarded ever,” he said.
Falling rates make switching easier
Cotality chief economist Kelvin Davidson said more borrowers are in a position to switch banks as many loans are on floating or short-term rates.
“Banks know that. They are trying to switch customers from other banks, and cashbacks are one way of doing that,” Davidson said.
Short deadline may limit uptake
Loan Market Agile director Rodney King said the offer will be especially helpful for buyers currently arranging finance.
"As yet, no other banks have started to match it, but it will be interesting to see if they do follow suit in the next couple of days,” King told OneRoof.
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