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ASB ramps up price war with 2.69% mortgage

ASB has stolen a march on its big four rivals with the launch of a 2.69% two-year mortgage rate, a new record-low.

Friday, May 22nd 2020, 9:32AM

The big four bank has made significant cuts to its home loan card that come into effect on Saturday. 

ASB's two year rate is reduced by 30 basis points to 2.69%, becoming the cheapest rate in the market by 10 basis points. 

ASB's executive general manager Craig Sims said the new rate showed the bank was "doing our part to support our customers on their home ownership journey".

Sims added: "We hope this will help them manage their home loans, or enable others to be in a position to get into their first home. This has been an incredibly challenging period for a lot of our customers, and we’re doing everything we can to support them and make things a little bit easier. We’re confident these new rates will help with that."

Aside from the record low two-year rate, ASB has made huge cuts to the rest of its card.

Its six month special rate falls by 34 basis points to 3.55%, three year special falls by 34 basis points to 3.35%. Four and five year special rates are also reduced by 34 basis points to 3.45% and 3.55%.

ASB said the new rates bolstered support options offered to customers in recent months, including mortgage deferrals. 

Sims said lower rates would help customers deal with the economic impact of Covid-19. 

"We’re conscious that the impacts of COVID-19 will still be felt for a while to come, and we will continue to help our customers through that. Our new special two-year low rate is part of this,” says Sims.

ASB's huge cuts will ramp up pressure on the rest of the big four to cut home loan rates. Westpac has announced a new one and two year rate of 2.79%, set to come into effect on Monday. 

Glen McLeod of Edge Mortgage's said the ASB cuts were "a great end to the week", with the banks "finally starting to provide the benefits to the customers".

McLeod said clients would be left with a decision on whether to seek short or long term options.

"Will we continue to see reductions post 24 June OCR? Or is this the banks changing based on the pressure from the Reserve Bank? Is now the time to lock in for the longer term or take a shorter term rate to see if you can get further reductions in 2021?"

The Reserve Bank is likely to welcome the increase in mortgage rate cuts in recent weeks. RBNZ deputy governor Geoff Bascand called on banks to pass on more cuts to borrowers this week, as wholesale rates fall due to central bank bond buying and the expectation of a lower official cash rate. 

Tags: ASB Lending

« BNZ tightens lending policyKiwibank smashes record with 2.65% home loan »

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Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
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 - 7.24 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 7.84 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 - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 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 6.69 6.45 6.19
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 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

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