OCR cut: Kiwibank, BNZ drop variable home loan rates after Official Cash Rate fall

Two more banks have reacted to the Reserve Bank’s Official Cash Rate cut by lowering floating mortgage rates.

Kiwibank and BNZ are the latest to lower their variable home loan rates. It follows similar moves by Westpac, ASB and ANZ yesterday.

Kiwibank this morning said its new variable and offset variable home loan rates were 5.80%. The bank’s new revolving loan rate is 5.85%. New rates will be in effect for new borrowers from Monday, October 13 and for existing borrowers from Tuesday, October 28.

BNZ’s standard variable rate has dropped to 5.99%, its TotalMoney variable rate has dropped to 6.09%, as has the rate for its Mortgage One and Rapid Repay loans.

Yesterday, Westpac announced its variable home loan rates will be cut by 0.3% a year next week. Most variable business lending rates drop by 0.5% pa.

ASB has also trimmed interest rates for customers, with executive general manager personal banking Adam Boyd saying there are “encouraging signs”.

It lowered its Housing Variable home loan to 5.99%, its Orbit Variable rate was lowered to 6.09% and its Back My Build rate was lowered to 3.54%. These come into place from Friday for new home loan customers and from Wednesday, October 15, for existing home loan customers.

ANZ was the first bank to move after the Official Cash Rate (OCR) cut, with managing director Grant Knuckey saying it would be welcome news for borrowers.

ANZ cut its flexible and floating home loans by 40 basis points (bps). Its floating home loan rate will be 5.89% from next Tuesday, and the flexible rate will be 6% from this Friday.

ANZ’s business flexible facility will be 5.89% from Friday. Business term loan base rates have also been cut by 40bps to sit at 4.15%.

The rate-cutting merry-go-round was in full swing before the OCR announcement.

The five major banks lowered rates by as much as 40bps across short- and long-term loans.

ANZ, ASB, Westpac, BNZ and Kiwibank all dropped their one-year rates to 4.49%.

Kiwibank has the best six-month home loan rate so far at 4.85%, for those with a minimum 20% equity, after cutting it by 20bps.

Meanwhile, rivals ANZ and BNZ trimmed their six-month rates by 10bps to 4.89%.

ANZ, ASB and BNZ shared the lowest two-year rates at 4.65%. Westpac cut its two-year rate further yesterday to 4.49%.

BNZ also cut its 18-month fixed-term rate by 26bps to 4.49%, matching that of ASB and Westpac.

Westpac was the first bank to offer sub-5% special home loan rates on all terms from six months to five years.

The OCR has now fallen 300bps since August last year, when it was 5.25%.

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