tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Tuesday, July 16th, 7:46PM

Mortgages

rss
Latest Headlines

ASB and Kiwibank trigger price war with 2.99% mortgages

ASB and Kiwibank have slashed mortgage rates below 3%, kicking off a new price war during the Covid-19 crisis. 

Friday, May 8th 2020, 7:42AM

ASB has cut its two year special to 2.99%. The new rate is effective from this morning, and marks a 6 basis point reduction on the old price. 

Craig Sims, ASB executive general manager of retail banking, said the low rate would help borrowers navigate through the new global financial crisis. 

“This has been a difficult time for a lot of our customers. While we have put in place a number of support options, including mortgage repayment deferrals and interest-only payments, we’re continually evolving what we are doing to help Kiwis get through the impact of Covid-19. Offering this two-year special rate is part of that."

ASB has also slashed its 18 months special home loan rate by 50bps to 3.25%.

ASB chief economist Nick Tuffley said the new rate was a direct result of the Reserve Bank's actions to push rates down post-Covid-19.

"These are clearly bearing fruit by enabling mortgage rates to fall to even lower levels,” Tuffley said.

“Lower interest rates like ASB’s two-year special rate will put cash into the pockets of the mortgage belt, helping to stimulate and restart the economy. Lower borrowing rates will also help to further alleviate any financial worries that borrowers may have,” Tuffley added.

Meanwhile, state-backed Kiwibank has cut its one year special to 2.99%, a drop of 10 basis points from its previous 3.09% offer. The new rate comes into effect on Monday May 11.

Kiwibank general manager of product Nicole Pervan said the bank wanted to provide "value" to customers.

“Customers with a fixed interest rate expiring within the next month are likely to roll onto a new interest rate 1% lower than their current rate," Pervan added.

“On an average sized loan this will reduce repayments from $50 to $70 which will go a long way at this time. Customers have the flexibly to pay off their loan faster or keep that money in their back pocket for a rainy day.”

The cuts come after wholesale interest rates began to price in further Official Cash Rate cuts by the end of the year. Markets give an 80% chance the OCR will fall to 0%. 

The sub 3% rates aren't the first in the New Zealand market. 

China Construction Bank launched a 2.80% 1 year mortgage, the cheapest in the market, earlier this week, and Heartland Bank offers a 2.89% one year rate, still the second cheapest. KiwiSaver provider Simplicity also has a 2.95% mortgage for members.

Yet ASB and Kiwibank's moves are likely to trigger a sub-3% price war, with other big four banks and challengers under pressure to match them. 

NZFSG's Bruce Patten described the cuts as "great news for borrowers".

He said borrowers were better off sticking to a one year mortgage, given the RBNZ's commitment to keeping rates on hold for a year.

"At the moment there is no reason for anyone to consider anything other than a 1 year rate, given the reserve bank has guaranteed the OCR to stay at current levels for at least 12 months," Patten added.

The Reserve Bank is set to outline its position on the OCR next week, with analysts divided on the prospect of 0% and sub-zero rates. 

Tags: ASB Kiwibank

« Markets price in strong chance of 0% OCROCR Preview: Economists predict rate will stay on hold »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.49 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.89 6.75 6.39
Median 8.64 7.14 6.82 6.65

Last updated: 15 July 2024 11:47am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com