Two banks reveal more interest rate cuts
Two main banks have started the week revising down a number of home loan interest rates.
ASB will drop its one-year rate by 10 basis points, to 7.29%.
Its two-year rate drops by four basis points, from 6.89% to 6.85%.
“We regularly review our rates, and the reduction to some of our key mortgage terms in part reflects how swap rates have responded to the Reserve Bank’s decision to hold the Official Cash Rate at 5.50%,” said executive general manager for personal banking Adam Boyd.
“We know that the rising cost of living is affecting our customers, and alleviating a bit of pressure will be welcome news for homeowners in the current environment.”
ANZ reduced its one-year rate by 15 basis points, its 18-month by 26 and its two- and three-year rates by 10 basis points.
That brings the one-year special rate to 7.24% and the 18-month special to 6.89%.
The Reserve Bank last week opted to keep the official cash rate (OCR) on hold, despite a prediction from ANZ that another increase might be needed to bring inflation under control.
Markets are still pricing in an OCR reduction later this year, although the Reserve Bank does not expect that to happen until 2025.
Brad Olsen, chief executive of Infometrics, said the rate changes seemed to be driven by competitive pressures.
He said the 18-month rate might have been identified as a term that was attractive to borrowers worried about near-term interest rate movements.
David Cunningham, chief executive at Squirrel, said the term deposit rate cuts also being announced were in line with what he expected.
ANZ has cut cuts its one-year, 18-month and two-year term deposit rate by 10 basis points. The three-year rate drops by 20.
He said the one-year term deposit rate was likely to fall further, which was likely to trigger a reduction in short-term lending rates.
He said people who shopped around should be able to get home loan rates below 7% on all home loan terms.
“The dovish tone to last week’s Reserve Bank OCR review is contributing to these downwards moves, and there’s likely more to come - and potentially much more - in terms of lower term deposit and fixed home loan rates.”