He said the rate had previously been in a “no man’s land” between Kiwibank and the other major lenders – not the cheapest on offer, but not the most expensive either.
“Why have your floating rate lower than the bulk of your competitors? Just quietly put it up and go ‘We may as well just take a bit more profit’. It’s as simple as that.”
Cunningham said all other major influences on home loan rates had remained the same since ANZ last changed its floating home loan rate on November 26, so it seemed that market conditions were the sole driver of the move.
He said it would also help to fund the bank’s 1.5% cashback offer for new home loan customers, which had been extremely popular. One Squirrel customer had received more than $30,000.
“For mortgage brokers it was sort of a gold rush, almost everyone that had the opportunity took it ... even as mortgage advisers, where we see a lot happening, we were pretty gobsmacked when we saw ANZ come out with that.”
He said banks were now competing with cashback rather than better interest rates, which meant those who did not move missed out.
Customers should “play the game” when they could and move banks to earn cashback when it was available, he said.
A spokesperson for ANZ said it was committed to offering competitive home loan rates.
“Since the OCR began to fall in August 2024, we’ve lowered our floating rate by 2.95 per cent, more than any of the other main banks.
“On Tuesday, we announced a small change to our floating and flexi rates to align with market conditions.
“Ahead of the November OCR cut, our floating rate was already below most of the main banks. Our new rate remains competitively positioned among the main banks in the market today.
“We’ll continue to review rates as global and local conditions evolve.”
Cunningham said the New Zealand banking system was hard to break into because the existing banks could adjust prices across their range to alter what profit they made.
“You’ve always got a bunch of products you can compete to protect your margin.
“Whereas if you’re a mono-line provider and the competition turns to fixed-rate loans and you haven’t got a floating rate loan to subsidise it or a credit card or a personal loan at a high margin or cheap deposits to subsidise it... that’s why the system is so resilient against attackers.”
- RNZ
