Kiwibank matches most of the market
Kiwibank, who kicked off the latest mortgage rate war last month with a one-year fixed "special" on the same day Reserve Bank governor Alan Bollard opened the door to a possible official cash rate (OCR) cut, has belatedly matched most of the rest of the market's across the board cuts.
Thursday, May 17th 2012, 4:13PM
by Jenny Ruth
Notably, despite wholesale markets having priced in a cut of about 30 basis points in the OCR by September, not a single bank has cut its floating rate.
It is also notable none of the banks are passing on into their standard rates the full extent of the drop in wholesale interest rates recently. For example, since April 12, three-year swap rates have fallen about 100 basis points and five-year swap rates are down more than 70 points.
Kiwibank is keeping its 4.99% one-year fixed rate for those with equity of at least 30% but reiterated it's for "a limited time."
"Kiwibank normally operates short-term specials for no more than three weeks but is keeping the 4.99% offer open because of the phenomenal success of the promotion," it says.
Kiwibank spokesman Bruce Thompson says the bank has lent about $150 million to more than 700 customers on its special.
However, it has cut its standard one-year fixed rate to 5.25% from 5.65%, matching a number of other banks including ANZ National Bank, ASB Bank, SBS Bank and Westpac.
Similarly, its two-year fixed rate is now 5.55%, down 24 basis points, matching ASB and sister institutions Bank Direct and Sovereign and the Public Trust's two-year rates.
Kiwibank has cut its three-year fixed rate by 35 basis points to 5.75%, which is still 10 points above SBS and HBS Banks' 5.65% three-year special, and cut its five-year rate by 40 points to 6.5%, well above SBS and HBS Banks' 5.99% five-year special. SBS and HBS' specials apply to those with at least 20% equity.
Kiwibank has also cut its four-year fixed rate by 40 points to 6.1% which is the lowest four-year rate in the market ahead of The Co-operative Bank and Public Trust's 6.25% rates.
| « Why aren't the banks cutting their floating mortgage rates? | More home loan rate cuts to come » |
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