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Banks weigh up fixed rate cuts

Most borrowers are yet to benefit from the Reserve Bank's OCR cut, but banks say they are weighing up cuts to fixed rate mortgages. 

Tuesday, March 17th 2020, 9:47AM

Yesterday, ANZ, ASB, Westpac, Kiwibank, SBS Bank, TSB, and The Co-operative Bank all announced they would pass on the central bank's 75 basis point rate cut. 

This morning, ANZ followed up to cut its commercial, business and agri floating term loans, flexi and overdraft base rates by 0.75%. Rates will drop from March 19.

Yet none of the banks made cuts to their fixed rate lineups. The cheapest rates in place have not changed since the unprecedented interest rate cut, but banks are reviewing their options. 

Only an estimated 15% of Kiwi borrowers use a floating rate, unlike other markets including Australia. 

Banks said they would look at their rate lineups this week. 

"Fixed rate home loans are under review," said an ANZ spokesman.

Meanwhile, an ASB spokeswoman said: "We regularly review our rates to ensure we are providing the best service for our customers, as part of this, we cut a number of fixed rates last week."

"Our fixed rates are under review but we don’t have a timeline," said a Westpac spokesman. 

The Co-operative Bank will be "reviewing over the week", a spokeswoman said. 

"We are continuing to monitor the rates daily and will adjust as needed," said a TSB spokeswoman. 

Kiwibank said it was "focused on variable rates", adding "We’ll continue to review market conditions and ensure our rates across the board are competitive."

The unprecedented 75 basis points puts New Zealand's banks in a difficult dilemma. With term deposit rates poised to drop even further, they will also be under pressure to drop fixed mortgage rates. 

Yet analysts believe banks are already operating at close to their minimum interest rate levels. 

" think it makes sense that the banks won’t want to reduce all of their rates, because they still need to protect margin and keep some money coming in from the deposits side," Davidson added.

Tags: ANZ ASB Kiwibank Lending Mortgage Rates mortgages SBS The Co-operative Bank TSB Westpac

« Banks pass on floating rate cuts after OCR decisionHouse prices to fall for six months: ASB »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.95 3.29
ANZ 4.44 3.10 3.50 3.84
ANZ Blueprint to Build 1.68 - - -
ANZ Special - 2.50 2.90 3.24
ASB Back My Build 1.79 - - -
ASB Bank 4.45 2.55 2.95 3.29
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.55 2.95 3.25
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 3.15 3.22 3.85
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 1.95 1.85 2.35 2.45
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.15 2.35 2.75
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 3.34 3.34 4.14
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 2.49 2.49 3.29
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.69 2.99 3.29
SBS Bank Special - 2.19 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.29 - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.89 3.19
The Co-operative Bank - Standard 4.40 2.99 3.39 3.69
TSB Bank 5.34 3.30 3.69 4.04
TSB Special 4.54 2.50 2.89 3.24
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 3.15 3.49 3.89
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.89 3.29
Median 4.54 2.68 2.99 3.29

Last updated: 19 July 2021 9:09am

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