ASB trims rates across home and business lending
ASB has announced interest rate reductions of up to 0.25% across its personal, business, and rural lending products following the Reserve Bank’s latest decision to lower the official cash rate (OCR).
Lower variable rates for nearly 150,000 customers
Adam Boyd (pictured), ASB’s executive general manager for personal banking, said the bank’s move is aimed at supporting customers during the current easing cycle.
“As the easing interest rate cycle continues, we are maintaining support for our customers with lower lending rates,” Boyd said.
“Our variable loans are held by nearly 150,000 New Zealanders across personal, business, and rural lending and these rates are the lowest they’ve been in more than two years."
Relief for borrowers, balance for savers
While ASB is delivering relief to borrowers, it has opted not to pass on the full OCR reduction to savers.
“We carefully consider the impact rate reductions have for all our customers,” Boyd said.
This “response to the OCR will bring relief to households and businesses while acknowledging the needs of our savers by not passing on the full 25 basis point cut to our savings products.”
Rate changes across lending and savings products
Key changes include:
- Housing variable rate: down 20 basis points from 6.64% to 6.44%
- Orbit variable: down from 6.74% to 6.54%
- Business base rate: cut 25 basis points from 11.77% to 11.52%
- Rural base rate: down 25 basis points from 9.01% to 8.76%
ASB also confirmed it will reduce rates on some savings products, including Savings On Call and Headstart, by 20 basis points – though not the full OCR cut.
Major banks respond to OCR cut with sharper rates
ASB’s move follows the Reserve Bank’s widely anticipated cut to the official cash rate to 3.25% last week, and mirrors similar rate reductions from ANZ and BNZ. ANZ recently dropped its one-year special to 4.95% and its 18-month rate to 4.89%, matching BNZ and Westpac.
With challenger banks offering even lower carded rates, margin pressure is intensifying as lenders compete for increasingly price-sensitive borrowers. Analysts note rate cuts are being driven more by competition than falling funding costs.
Read the ASB media release here.
