BNZ has joined the other main banks and cut its fixed mortgage rates. Photo / File
BNZ has cut most of its fixed mortgage rates this morning, bringing its rates into line with cuts by other banks in the last two weeks.
There has been slump of around 50-80 basis points in wholesale interest rates rates in the last six weeks as fears about the European
debt crisis hit expectations for growth and inflation globally.
Also, bank profit margins have risen around 40 basis points in the last two years because of a massive shift in customers from less profitable fixed mortgage rates to more profitable floating rates. Banks are now in a much more competitive mood thanks to these bolstered profit margins and a surfeit of cash on their now much stronger balance sheets.
They are also trying to fire up profit growth through increased lending, given annual lending growth has slumped from 10-15 per cent through the mid-2000s to 2 per cent in 2012.
BNZ already had the lowest 18 month mortgage rate of 5.10 per cent, but this morning it cut its 1 year rate by 50 basis points to 5.25 per cent and cut its 2 year rate by 24 basis points to 5.65 per cent.
