Kiwibank slashes one-year fixed mortgage rate to 4.99%

Hot on the heels of Reserve Bank governor Alan Bollard opening the door to a possible interest rate cut, government-owned Kiwibank has slashed its one-year fixed mortgage rate to just 4.99%.

Thursday, April 26th 2012, 2:10PM

by Jenny Ruth

Kiwibank says the new "special," which compares with its standard one-year fixed rate of 5.65%, the same as its floating rate, is available to those with at least 30% equity and will be on offer for a limited time.

The Kiwibank offer sharply undercuts the previous lowest one-year rate in the market, HSBC's 5.29% - when it launched the rate in March, which is only available to customers with homeloans above $500,000 or savings and investments of at least $100,000, HSBC says it was the lowest one-year fixed rate offered in New Zealand in more than a decade.

The next lowest one-year rate is Public Trust's 5.4%.

In his latest review of his official cash rate (OCR), Bollard warned he will need to reassess "the outlook for monetary policy settings" if the currency remains strong without anything else changing. Wholesale financial markets have now priced in a 20% to 30% chance of a rate cut, although economists still expected the next OCR move will be up.

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