Banks slash mortgage rates as borrowers regain confidence
Westpac New Zealand is cutting several of its advertised special home loan rates, continuing a trend of passing on funding cost reductions to borrowers.
Starting today, the bank’s 18-month and two-year special fixed rates will drop to 4.45% p.a., while the six-month rate falls to 4.89% p.a. and the three-year rate to 4.75% p.a.
The latest cuts give Westpac the lowest two- and three-year rates among the country’s five largest banks as of Thursday afternoon.
The move comes amid intensifying competition, with BNZ trimming up to 0.4% off six of its fixed terms following the Reserve Bank’s 50-basis-point OCR cut to 2.5%.
“We’ve cut our two-year rate three times this month”
Sarah Hearn (pictured), Westpac NZ managing director of product, sustainability, and marketing, said the latest changes underline the bank’s commitment to easing pressure on homeowners.
“This is the third time this month we’ve cut our two-year advertised special home loan rate, and it means we’ve decreased it by a total of 1.2% over the past year,” Hearn said in a media release.
“We’re working hard to offer great rates and options to help homeowners keep more money in their back pockets.”
She said while one-year loans remain most popular, borrowers are increasingly looking at slightly longer terms for greater stability.
“While our one-year rate remains the most popular with customers, putting some of your home loan across a longer term, for example onto an 18-month or two-year rate, offers greater certainty.”
RBNZ easing supports lower funding costs and stability
The Reserve Bank’s recent 50-basis-point OCR cut to 2.5% has set the tone for broader lending adjustments, with Stats NZ reporting inflation at 3% – the top of the RBNZ’s target band.
BNZ, ASB, and ANZ have all reduced fixed-term rates in response to the easing, with BNZ’s new 18-month offer of 4.45% matching Westpac’s and ASB’s market-leading rate.
Term deposit rates trimmed as savings demand shifts
Alongside the home loan changes, Westpac is also reducing some term deposit rates by between 0.05% and 0.3%.
“We also know savers will be watching falling rates closely,” Hearn said. “We encourage customers to use our Savings and Investment Chooser Tool or talk to us if they have any questions about their savings options.”
She added that the bank’s 32-day Notice Saver rate remains unchanged at 3% p.a., despite the past two official cash rate cuts.
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