Westpac has moved to cut some of its advertised fixed-term mortgage interest rates, on the heels of cuts by Kiwibank earlier in the day, matching the state owned bank's new market low offers over two and three years. And late in the day, ASB cut its four and five year
Three major banks cut mortgage rates
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Banks have continued making cuts to mortgage rates.
As for the 4.99 per cent one-year special, which requires borrowers to have equity of at least 30% in their home, Kiwibank said it was keeping this offer open due to its "phenomenal success." Kiwibank said the offer was its most successful special to date, with it having lent $110 million through it as of last Friday.
The special was launched on April 26 and Kiwibank normally operates short-term specials for no more than three weeks. Kiwibank said the special was not a loss leader with it making "acceptable returns" on the 4.99 per cent rate.
"The rate prompted a flurry of rate changes by other banks, but no direct match for the special," said Kiwibank.
Kiwibank's fresh round of cuts brings its standard one-year rate in line with major rivals ASB, ANZ, National Bank and Westpac, but trails the 5.20 per cent rate advertised by TSB Bank. BNZ has a 5.10 per cent 18-month rate.
For two years, Kiwibank and Westpac's new rate matches ASB's as the lowest advertised by a bank, as does the two banks' new three-year rate. Kiwibank's new four-year rate is also the lowest advertised rate on offer, with its five-year rate bettered by SBS Bank's 6.20 per cent.
The banks have been cutting their fixed-term mortgage rates with swap, or wholesale, interest rates the banks' themselves borrow at also falling on concerns about the state of the global economy. Financial markets are now pricing in 30 basis points worth of cuts to the Official Cash Rate, from its record low of 2.5 per cent, by the year's end.