Kiwibank one-year rate special "extremely successful"
Kiwibank is ending its one-year home loan rate special tonight, hiking it back up to 6.45% after three weeks of having it at 6.15%, matching the floating rate.
Thursday, February 3rd 2011, 4:00PM 
5 Comments
by Jenha White
Kiwibank communications manager Bruce Thompson says while he can't release the figures, the short term promotion was extremely successful and there was temptation to keep going.
He says the special was done because interest rates were static for such a long time.
Thompson says Kiwibank thought it would start 2011 with something new and only do it for a short period because it wasn't related to the wholesale rates.
"We wanted to stir up the market and see what happened, particularly we were interested in new home buyers, those who had maturing loans with other banks, or money on variable loans with other banks.
"Because of its success, it is something we would consider again."
Kiwibank continues to offer a floating rate of 6.15%.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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Being able to re-negotiate and secure a new interest rate with your bank as far out as possible from your fixed rate expiry (especially in an increasing interest rate environment) is one of biggest savings you can potentially make on a mortgage. Kiwibank now charges its home loan clients to do this, none if the other banks do. Oh well these people who refinanced to Kiwibank will find this out in due course no doubt.
I have 8 mortgages with ANZ and have a mix of floating , 1Yr and 2Yr fixes.
Surely the current abysmal fiscal state of NZ Post Limited requires a cash injection before it can pump out lending at such low rates.
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The average 1yr and floating rates with main banks is 6.45%, a difference of .3% or $300pa per $100k of borrowing. It most likely cost them more than they will save in interest over the next 12 months to switch, more importantly I wonder how many of these people refinanced after being 2 or 3 years into their mortgage (now 22 yrs to go etc) and Kiwibank have given them a 25 or worse still 30 yr term in order to meet their servicing criteria and the clients are unaware because they got sucked into focusing on the carrot of a perceived better interest rate.