Rate cuts spark new opportunities for mortgage advisers
Banks have begun reducing mortgage and savings rates following the Reserve Bank’s decision to cut the official cash rate (OCR) from 3.25% to 3%.
Westpac leads with new market lows
Westpac was among the first to respond, trimming four basis points off its one-year, 18-month, and three-year fixed-term special mortgage rates, and 20bps off its two-year rate.
Its one-year, 18-month, and two-year special rates now stand at 4.75% – a new low for the mortgage market – while its three-year rate dropped 30bps to 5.09%.
Westpac also decreased its four-year special home loan rate, effective Aug. 22.
“We know cost pressures continue to weigh on many households and businesses, and we’re acting swiftly to pass on lower rates for borrowers,” said Sarah Hearn (pictured left), Westpac NZ’s managing director of product, sustainability and marketing, in a media release.
“Our consistent offer of 4.75% per annum across the one-year, 18-month and two-year home loan terms will appeal to customers looking to split their loans across different terms, given the changing outlook for the OCR.”
Major banks cut floating and flexible rates
Prior to the OCR cut, major banks had already reduced their one-year mortgage rates to 4.79%.
Following the announcement, Westpac, ANZ, and Kiwibank dropped their flexible and floating lending rates by 20bps.
Westpac is cutting variable home loan rates by 0.20% p.a., effective Aug. 25, for new customers and Aug. 28, for existing customers. Most variable business lending rates at Westpac are also being reduced by 0.20% p.a. from the same dates.
ANZ lowered its floating home loan rate by 20bps to 6.29% and its flexible home loan rate by 20bps to 6.40%, effective Aug. 22, for new loans and Aug. 26, for existing loans.
“The cuts to Floating and Flexible home loan rates will provide further relief for those customers who may be waiting to see where interest rates land before moving to a longer-term rate,” said Grant Knuckey (pictured right), managing director for personal banking, in a media release.
Kiwibank dropped its variable home loan rates by 20bps to 6.15% and its revolving loan to 6.30%. The bank also cut its 90-day notice saver rate by 25bps to 2.85% and its 32-day notice saver rate to 2.3%,
BNZ also announced new rates effective Aug. 27, with its standard variable rate loans at 6.29%, and fixed rates including 4.79% for one-year and 18-month terms, 4.89% for two years, and 4.99% for three years.
BNZ’s Green Home Loan top-up is available for three years at just 1% p.a. for eligible customers with at least 20% equity, capped at $80,000.
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