Banks battle for borrowers
TSB has lowered its one-year fixed mortgage rate to 4.39% per annum, extending the rate-cutting trend sweeping New Zealand’s mortgage market.
The move represents a 10-basis-point drop from TSB’s previous rate card and positions the bank below the country’s main lenders, which remain at 4.49% for the same term.
It isn’t market-leading but it is notable all the same. Challenger banks ICBC (4.25%) and Bank of China (4.28%) still offer slightly lower one-year rates. However, TSB’s move takes pricing back to early 2022 levels, marking a meaningful signal for borrowers and brokers, interest.co.nz reported.
TSB started the current cutting cycle in mid-September, introducing a 4.49% two-year rate when the majors were offering 4.75%. The main banks have since followed down to match that 4.49% level – and now, most have moved their one-year fixed term to the same rate that TSB has just undercut again.
The cut comes after the Reserve Bank (RBNZ) reduced the official cash rate (OCR) by 50 basis points, prompting banks to pass through lower funding costs.
Burgess: Supporting financial confidence amid changing conditions
Penny Burgess (pictured), TSB general manager of customer delivery, said the rate cut was part of the bank’s effort to help customers navigate a changing financial landscape, 1News reported.
“We’re helping customers keep more money in their pockets and feel more confident about their financial future,” Burgess said.
While the bank did not announce any changes to term deposit rates, advisers note that lower home loan rates could boost refinancing activity and create renewed borrower confidence heading into summer.
What it means for advisers
With major lenders and challenger banks now slashing rates, advisers are entering one of the most competitive mortgage markets since 2021.
For clients, shorter fixed terms – such as one-year or 18-month loans – are becoming increasingly popular as borrowers look to capture savings now while keeping flexibility for future OCR cuts.
As funding costs continue to fall and competition heats up, advisers are well positioned to negotiate sharper deals and guide clients through refinancing, break fees, and lender incentives in a fast-moving rate environment.
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