Mortgage rates: TSB introduces 4.39% one-year fixed rate, putting bank ahead of competitors

TSB’s new rate comes from a cut of 10 basis points to its one-year fixed loan, down from 4.49%. Photo / 123rf

TSB has introduced the lowest advertised mortgage rate on the market, a one-year fixed rate of 4.39%.

Penny Burgess, general manager of customer service at TSB, used the announcement to encourage mortgage holders with other banks to make a switch.

“With the cost of living continuing to stretch household budgets, we know many New Zealanders are looking for ways to ease financial pressure,” Burgess said.

“By offering a sharp home loan rate, we’re helping our customers keep more money in their pockets and feel more confident about their financial future.

“As a community-owned bank, we’re here to support Kiwi, and this is one of the ways we’re showing up for our customers when it matters most.

“If you’re not already with TSB, now’s a great time to make the switch.”

TSB’s new rate comes from a 10-basis-points cut to its one-year fixed loan, down from 4.49%.

Other retail banks, including ANZ, ASB, Westpac, BNZ and Kiwibank, were all advertising one-year fixed rates of 4.49% as of yesterday evening.

Penny Burgess, general manager of customer service at TSB, used the announcement to encourage mortgage holders with other banks to make a switch.

Westpac, BNZ and ASB are advertising a 4.45% rate for their 18-month fixed-term loans, which was the overall lowest rate among retail banks before TSB’s announcement. TSB’s 18-month rate is 4.75% and ANZ’s is 4.49%.

For six-month term rates, Westpac is advertising 4.89%, ASB 4.85%, BNZ and ANZ 4.79% and Kiwibank 4.75%.

Of the two-year term rates on offer, BNZ, Kiwibank, ANZ and TSB are advertising 4.49%, and ASB and Westpac are advertising 4.45%.

After cutting its rates last Thursday, Westpac has the lowest three-year rate advertised among retail banks, 4.75%. ASB, BNZ and ANZ are advertising rates of 4.79%. TSB and Kiwibank, meanwhile, have rates of 4.89%.

It comes three weeks after the Reserve Bank dropped the Official Cash Rate (OCR).

The Reserve Bank’s Monetary Policy Committee said it remained open to further reductions in the OCR, as required for inflation to settle sustainably near the 2% target mid-point in the medium term.

Last Monday, new figures revealed inflation had hit 3%. Statistics New Zealand data showed the Consumer Price Index (CPI) increased 3% in the year to the September quarter.

Stats NZ spokeswoman Nicola Growden attributed most of the rise to increases in the cost of electricity, rent and council rates.

Economists had widely expected the annual rate to land at about 3%.

But there was widespread agreement that this would represent a peak in this latest cycle of inflation, allowing the Reserve Bank to look through the breach and cut the OCR again in November.

Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.

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