SBS Bank is getting a brand makeover, moving to orange as its new colour. Photo / File
SBS Bank is getting a brand makeover, moving to orange as its new colour. Photo / File
SBS Bank's market-leading home loan rate of 3.99 per cent would spur on other banks to lower their rates, says an economics and finance professor.
SBS Bank chief executive Wayne Evans announced the rate yesterday as the bank moved to refresh its brand.
Associate Professor David Tripe, of Massey University,told Newstalk ZB this morning the rate would encourage other banks to reassess their home loan policies.
"They may not exactly match it,but there will be some continued looking at their interest rate structures with a view to pushing them down in dribs and drabs," he said.
"It's a market grab, but [SBS Bank] is a relatively small player in the market, they're not going to be able to cope with billions of dollars of lending."
Tripe said the new rate from SBS Bank was further expression of confidence that the Official Cash Rate would come down in December and continue to fall throughout next year.
"Certainly it could be as low as 2 per cent some time next year, that's not unrealistic, but it isn't necessarily what I would forecast."
Tripe said the 3.99 per cent rate wouldn't "make people go nuts on borrowing".
The 3.99 per cent rate that SBS Bank is offering is available for new lending over $100,000 for residential, owner-occupied properties with minimum equity of 20 per cent.
