Banks seized the opportunity yesterday to reduce fixed-term mortgage rates, undermining efforts by the Reserve Bank to keep a lid on inflation by holding up rates.
Monday, June 20th 2005, 6:45AM
by The Landlord
State-owned Kiwibank became the lowest in the market when it cut its two-year fixed rate to 7.35 per cent from 7.5 per cent soon after Reserve Bank governor Alan Bollard left the official cash rate unchanged yesterday.
Chief executive Sam Knowles said there was room to cut two-year rates because of economic conditions, "including the decision by the Reserve Bank to hold the official cash rate".
National Bank also reduced its two-year rate yesterday, from 7.8 per cent to 7.65 per cent, and its three-year rate to 7.6 per cent. Those rates were matched by ASB Bank.
