BNZ drops rates below 6%, heating up mortgage war
23rd Jan 09, 1:44pm
Hostilities are rekindling in the mortgage war as BNZ followed Kiwibank in dropping mortgage rates below 6%. Now leading the market, BNZ cut its Classic 6 month rate by 54 basis points to 5.95%. Earlier, Kiwibank cut its one year fixed rate to 5.99%. BNZ also cut its one and two year standard rates by 100 basis points to 5.99%, and its six month standard/flybuys rate 50 basis points to 6.49%. Rate changes will be effective from January 24. The latest rate revisions follow the market consensus that the Reserve Bank of New Zealand will cut the Official Cash Rate by at least 100 basis points next Thursday. The money markets now appear to be moving toward expecting a 125 basis point cut, based on the 90 day bank bill rate. The 90 day rate has historically sat 25 basis points above the OCR and was at 4.07 on Thursday, down from 4.29 on Wednesday. A borrower coming off a two year fixed rate now would save NZ$31 a week for every NZ$100,000 borrowed, if they were to take up one of these new rates. You can do calculations for your specific circumstance on our mortgage calculator. Commenting on the latest rate cuts, BNZ General Manager of Strategy and Marketing Blair Vernon said: "We're continuing to see a reduction in wholesale funding costs and we want customers to feel the benefit of those changes." A full list of mortgage rates offered in New Zealand can be found here.