Kiwibank follows rivals with big mortgage rate cuts

Kiwibank, which led its rivals in cutting two-year fixed home loan rates last week, has now followed them by reducing its three, four and five year rates.

Kiwibank said it had dropped its three-year rate by 45 basis points to 7.25 per cent per annum from 7.70 per cent, four-year by 65 basis points to 7.55 per cent from 8.20 per cent and five-year by 75 basis points to 7.75 per cent from 8.50 per cent.

Last Thursday morning Kiwibank cut its two-year rate to 6.99 per cent from 7.30 per cent. Other banks followed by also cutting longer term rates. The cuts to fixed rates come after falls in long-term swap rates.

Sister banks ANZ and National announced a 75 basis point cut in their five year mortgage rate late on Thursday, triggering moves in response by BNZ, ASB and Westpac on Friday.

Their five year mortgage rates are now grouped around 7.75 per cent to 7.85 per cent, a significant flattening of the mortgage rate curve. However, these rates remain well above the 5.9 per cent rates that most are charging for their variable rates. See all bank mortgage rates here.

INTEREST.CO.NZ