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Westpac cuts 1, 2 yr, 18 mth mortgage rates; still no bank variable rates cut
Westpac announced on Tuesday it would lower its one year, 18 month, and two year mortgage rates, effective from Wednesday morning. The one year rate will be reduced by 30 basis points (bps) to 5.40%; the 18 month rate by 21 bps to 5.89%; and the two year rate by 10 bps to 6.25%.
See all the rates on our mortgage rates page.
Two weeks ago, following the 50 basis point cut in the Official Cash Rate by the Reserve Bank, Westpac cut its six month mortgage rate by 40 bps to 5.39%.
Westpac reported last week that its net interest margins had increased to 225 basis points in the six months to March 31 from 216 basis points in the six months to the end of September, meaning it may have had a bit more room to cut rates than other banks in New Zealand.
As of yet, no bank has cut a variable mortgage rate following the OCR cut. Last Thursday, ANZ National cut its six month rate by 34 bps to 5.45%, and its one year rate by 29 bps to 5.50%.
TSB announced on Tuesday morning it was cutting its six month mortgage rate by 35 bps to 5.64%, and its one year rate by 9 bps to 5.70%. SBS also cut six month and one year rates by 29 bps to 5.50% and 7 bps to 5.70%, respectively.
Meanwhile, building society CBS Canterbury increased its two and three year mortgage rates by 15 bps to 6.40% and 6.95%, respectively.
1 Comments
Hi Alex It is interesting
Hi Alex
It is interesting that one bank (ANZ) moves and now other banks are starting to follow reducing their short-term interest rates. Just goes to show competition is stronger than Allan Bollard waving a big stick at them.
I have a question which I would be interested to get Interest .co.nz views on. Currently we have low (mortgage) short-term rates due to the low OCR and long term rates which are comparatively higher due to the credit crunch. Will at some stage these rates shift over as Dr Bollard increases the OCR to combat inflation but long term rates reduce due to borrowing costs reducing overseas as liquidity comes back into the overseas market? If this was to happen, can you glaze into your crystal ball and tell us when.....
Gazza, you sure have a
Gazza, you sure have a way with the humour. "borrowing costs reducing overseas as liquidity comes back into the overseas market" For this you don't need a crystal ball, you need the Hubble telescope.
Expect Bollard to be forced into raising the ocr as the wave of inflation arrives from overseas and if you want to make a few bob, bet on the banks lifting fixed rates above 10% before the next election arrives.
A few Bob! Stone me, that was when money actually held its value.
Remember, your chocolate fish is soon to cost $10 per fish!
Wally - and you will
Wally - and you will need quota to buy the $10 fish.
You have explained this well,
You have explained this well, Have you been working on this a long time?? Do you think you have described everything correctly though I have noticed some common mistakes but I get the point your making? I will link your blog to mine.