Mortgage wars: Home loan rates drop even lower as TSB offers 2.49 per cent rate

Nikki Preston

17 Aug, 2020 06:04 AM2 mins to read

The property market seems to be out of the "danger zone", as long as New Zealand can keep a second wave of Covid-19 at bay. That's the analysis from economist Tony Alexander, while taking part in the OneRoof Property Panel.

Home loan rates have been slashed again - with TSB offering a one-year home loan rate of 2.49 per cent.

The staggering low rate is believed to be a market record and puts it 0.06 per cent lower than all the other major banks.

TSB's two-year home loan rate will also sit at 2.65 per cent as of tomorrow - 0.04per cent lower than any of its major competitors.

TSB general manager marketing and customer experience Justine St John said TSB's new one and two-year rates was the lowest ever offered by the bank and the best currently offered by the major banks.

"TSB is focused on supporting New Zealanders with consistent low lending rates at a time when Covid-19 continues to create economic uncertainty."

As well as slashing its home loan rates, TSB has previously committed to match any advertised fixed rate offered by an Australian bank.

"We're also pleased to give New Zealanders another reason to bank local and keep money revolving through our local economy at a time like this."

While TSB's rates are available to customers with at least 20 per cent equity, ASB announced last month that those with a small deposit would be offered the same special interest rates that those with a deposit over 20 per cent can get.

Home loan rates dropped to all-time lows this year after the official cash rate was slashed to 0.25 per cent in May. The Reserve Bank has signalled this rate will be kept low for at least a year.

Kiwibank dropped its one-year fixed rate to 2.99 per cent in May, claiming at the time to be the first bank to offer a sub 3 per cent home loan interest rate. ASB and ANZ quickly followed suit.