Kiwibank cuts 2 year mortgage rate to 7.99%
25th Sep 08, 10:52am
Kiwibank has announced it has cut its two year mortgage rate to 7.99% from 8.29% to "jump the gun" on a cut in the Official Cash Rate next month and because most of its funding is from local retail depositors rather than expensive international wholesale markets. The full Kiwibank statement is below. The full comparison of Kiwibank's rates with others is available here on our mortgage rates table.
Kiwibank has today cut its key two-year home rate to 7.99% per annum, the only bank in New Zealand to have any rates below the benchmark 8% level. The Kiwibank rates compares with the other main banks that are presently offering two-year rates of around 8.70% and 8.90%. Kiwibank Chief Executive Sam Knowles said the bank was "jumping the gun" on an expected cut in the official cash rate late next month. "Rates are coming down, but for many home loan owners the falls have been too little and too slow. Kiwibank is speeding things up. There are a lot of homeowners who have loans due for renewal over the next couple of months. They can now switch to a rate that will give them certainty in these turbulent economic times," Mr Knowles said. He added that the lower rate would enable a significant proportion of New Zealanders with loans to refix their mortgages at about the same repayment level that they were on two years ago when there was intense competition on rates between the banks Kiwibank has been able to lead the home loan rate between between the banks because of its high level of domestic funding. "We are able to utilise the very high level of deposits we are receiving to fund our home loan lending. Alternative sources of funding from the international wholesale markets are much more expensive." Mr Knowles said.