Banks slash mortgage rates after OCR cut (update 6)

TSB, Westpac, BNZ, Kiwibank, ASB and SBS have slashed their mortgage rates after the Reserve Bank of New Zealand announced a record 150 basis point cut in its Official Cash Rate to 5% and called on banks to pass through lower wholesale rates to consumers and businesses. (Update 6 to include TSB's mortgage rate cuts). TSB held back on cutting its four and five year mortgage rates, but cut shorter term mortgage rates as follows:

Variable: down 1.0% to 7.70% 6 month: down 0.65% to 7.00% 1 year: down 0.36% to 6.95% 2 year: down 0.5% to 6.84% 3 year: down 0.24% to 7.40%

TSB's new rates will be effective December 5. Westpac have cut their fixed mortgage rates by between 0.25% and 0.55%. Changes and new rates are as follows:

6 month: down 0.25% to 7.10% 1 year: down 0.5% to 6.8% 18 month: down 0.4% to 6.79% 2 year: down 0.5% to 6.85 3 year: down 0.45% to 7.20 4 year: down 0.55% to 7.30 5 year: down 0.45% to 7.40

BNZ cut its Total Money variable mortgage rate to to 7.75% from 8.29% and down from 8.99% a fortnight ago. It also cut its Classic six month rate to 6.49% from 6.99% (20% deposit required). Kiwibank dropped its mortgage rates by between 0.2% and 0.5%. Its new one year fixed rate was lowered to 6.49%, a drop of 0.5%. Kiwibank's one year rate has been lowered by 150 basis points since the week ended November 7. Kiwibank's new rates are as follows:

Variable: down 0.5% to 7.45% Revolving: down 0.5% to 7.45% 6 month: down 0.5% to 6.99% 1 year: down 0.5% to 6.49% 2 year: down 0.4% to 7.19% 3 year: down 0.25% to 7.40% 4 year: down 0.2% to 7.70% 5 year: down 0.2% to 7.70%

Since November 7, Kiwibank has dropped its variable mortgage rate by 1.25%; 6 month by 1.3%; 1 year by 1.5%; 2 year by 0.6%; 3 year by 0.75%; 4 year by 0.9%; and 5 year by 0.9%. "The bank had made significant cuts to its rates in late November in anticipation of the move by the Reserve Bank," Kiwibank chief executive Sam Knowles said. "The decision by the Reserve Bank to make a cut of 1.5% gives Kiwibank room to pass on further savings to those with home loans," Knowles said. ASB was the first bank to respond to the record OCR cut by dropping its floating mortgage rate by 0.75% to 7.95% (effective December 5). SBS also slashed its floating rate by 1.95% to 7.2%. Its floating rate is now below all of its fixed mortgage rates. "SBS Bank is able to pass on the full benefits of the OCR reduction and more because we are not affected by the increased cost of borrowing offshore, which has been a result of the global credit crunch," SBS Bank chief executive Ross Smith said. For a comprehensive list of all mortgage rates see here.    71041