ASB rate cuts match rivals, don't lead
ASB has reduced four key fixed home loan rates as mortgage competition heats up, while also trimming some term deposit rates.
Cuts across popular fixed-term mortgages
In its latest round of interest rate changes, ASB lowered several of its most popular fixed-term mortgage rates.
The six-month rate dropped by 16 basis points to 5.29%, while the one-year rate fell six basis points to 4.89%. Three-year fixed rates dropped to 5.09%, and four-year terms were reduced to 5.49%, down 10 basis points, 1News reported.
The changes bring ASB's six-month and one-year rates largely in line with other major banks, including recent cuts by BNZ.
Savings for home buyers and refinancing households
ASB’s executive general manager for personal banking, Adam Boyd (pictured), said the rate reductions would support both new buyers and existing customers.
“We know there are many New Zealanders looking to refix their mortgage or take on the significant title of homeowner this year, and we're pleased to support them with lower rates,” Boyd said.
The ASB leader highlighted the potential savings.
“Those considering our 12-month fixed home loan will be paying 2.50% less interest than they would have been 18 months ago,” Boyd said. “On a loan of $500,000, this reduction in interest translates to an extra $12,500 a year, which will make a real difference to many households across the country.”
Term deposit rates also revised
ASB also adjusted some term deposit rates downward by between five and 20 basis points. The bank no longer offers 4% on any term up to two years, previously a unique offering on its six-month term, 1News reported.
Rates match market, but don’t lead
According to interest.co.nz, ASB’s mortgage and term deposit cuts generally match but do not undercut rates from other big banks.
“The mortgage cuts are timid… they are only matching the other big banks at the one-year term, and are higher than some in all other terms,” the publication said.
Likewise, ASB’s term deposit rates are now similar to the lowest rates offered by competitors, reflecting tighter interest margins.
OCR at lowest level since 2022
The rate changes follow the Reserve Bank’s official cash rate (OCR) cut to 3.25% last month, the lowest since October 2022. The Monetary Policy Committee is set to meet again on July 9, where further signals on interest rates may emerge.
