Kiwibank joins rush, cuts fixed-term mortgage rates

Photo / Dean Purcell
Photo / Dean Purcell

Kiwibank has become the latest bank to cut some of its fixed-term home loan rates, dropping its two, three and five year advertised interest rates by 10, 29 and 29 basis points, respectively.

At the same time, Kiwibank has ended the "limited time special" it has been running, with a four-year rate of 5.99 per cent increased 51 basis points to 6.50 per cent.

The changes are effective from tomorrow, February 3.

Kiwibank's new 5.79 per cent advertised two-year rate matches those on offer from sister banks ANZ and National following recent cuts and Westpac. However, it's one basis point higher than TSB Bank's 5.78 per cent, the lowest advertised two-year rate by a bank.

The three-year 6.10 per cent rate matches ASB's, which is the lowest rate offered by another bank. The four-year 6.50 per cent trails the Co-operative Bank's 6.45 per cent but matches the next lowest rate from ASB.

At 6.90 per cent, Kiwibank's five-year rate is joint lowest with ASB.

The new four-year rate brings an end to Kiwibank's special which has been running since January 12 when the bank slashed its four-year rate by 80 basis points to 5.99 per cent from 6.79 per cent.

Kiwibank's cuts to fixed-term mortgage rates follow similar moves by the ANZ and National banks, ASB, SBS Bank, TSB Bank, Westpac and the Co-operative Bank over the past two weeks following a fall in the consumer price index in the December quarter and a benign Official Cash Rate outlook following the Reserve Bank's decision to leave the OCR at its record 2.5 per cent low last week.

However, the fixed-rate cuts come with a record 61 per cent of banks' on-balance sheet residential mortgages by value on floating, or variable, rates. Standard bank floating rates currently range from 5.65 per cent to 5.79 per cent.

INTEREST.CO.NZ

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