TSB cuts two year mortgage rate below 6%; lowest on market (Update 1)

TSB cut its two year mortgage rate on Friday morning by 20 basis points to 5.99%. It is currently the lowest two year rate on the market offered by a bank. Only the Police and Credit Union matches it at 5.99%. The move comes at a time when banks have generally been raising longer term mortgage rates. (Update 1 includes SBS Term Investment Rate change.) Other banks are currently offering two year mortgage rates around the 6.25% to 6.50% region, although Kiwibank is offering 6.09% (with an 80% loan value ratio), and HSBC is offering 6.15% for its Premier rate for mortgages above NZ$500,000. On Wednesday, Reserve Bank Governor Alan Bollard reiterated his disappointment that banks had not passed on the 50 basis point cut in the Official Cash Rate on April 30 to short term rates. The most notable downward move since the end of April was by BNZ, which cut its Total Money variable rate in the first week of June by 26 bps to 5.99%, bringing it in line with Kiwibank's rate. However at the same time BNZ also raised its one year and longer term mortgage rates. TSB and SBS cut their six month rates to 5.50% near the start of the month, although these moves brought them in line with other banks' offers. See all the latest rates on our mortgage rates page. Also on Friday, SBS announced that it would lower the interest rate on its three month term investment special for a minimum deposit of NZ$5,000, effective from Monday morning. The rate will be lowered by 10 bps to 4.65%. Despite the drop it will still be the highest three month term deposit rate offered by a bank. The average three month term deposit rate offered by banks for deposits over NZ$5,000 is 3.41%. To see term deposit rates offered in New Zealand for terms less than one year click here. For terms one year and greater click here.