The ANZ and National banks have cut one year, 18 month, two year and three year fixed-term interest rates following falls in wholesale interest rates and forecasts the Reserve Bank will cut the Official Cash Rate (OCR) following last week's devastating Christchurch earthquake.
However they left their floating rates on hold.
This afternoon ASB and Westpac followed this morning's moves by the sister banks with its own broader mortgage rate cuts. ASB said it was monitoring its floating more
The moves opens a new front in competition between the banks for dwindling demand for home loans. It also reverses the relationship between fixed and floating rates, taking ANZ, National, Westpac and ASB's fixed rates below their floating rates.
ANZ and National Bank cut their one-year fixed term home loans by 50 basis points to 5.95%. See all advertised mortgage rates here.
ASB followed the ANZ and National moves this afternoon, saying it was cutting all fixed-term mortgage rates from six months to five years from tomorrow, March 2. It cut its one year rate by 50 basis points to 5.95%, matching ANZ and National. See all ASB's changes to mortgage and term deposit rates here.
ANZ and National also cut their 18 month fixed rate by 26 basis points to 6.29%, their two year fixed rate by 16 basis points to 6.49% and three year home loan rate by 11 basis points to 6.99%.
The ANZ and National mortgage rate cuts come after parent ANZ New Zealand recorded housing term lending growth of just NZ$6 million to NZ$53.89 billion in the three months to December.
“Wholesale interest rates have recorded decreases across all terms,” the two banks said in statements.
“In addition markets are now forecasting a drop in the OCR, leading to lower interest rates generally. In response to lower wholesale rates, we are today announcing drops in our fixed rate home loan and term deposit rates.”
ASB also said its mortgage rate cuts reflected changing wholesale funding rates and market forecasts that the Reserve Bank is likely to lower the Official Cash Rate from 3% next week.
"With wholesale call and 90 day rates reflecting little change at present we will continue to monitor our variable home loan interest rate leading up to the OCR announcement next week," ASB added. "ASB’s Term Deposit rates have also been reduced to reflect the changes in wholesale rates."
The 90 day bill rate has fallen 33 bps to 2.86% this week, while the one year swap rate has fallen 40 bps to 2.97%.
ASB is dropping its six month fixed rate by 50 basis points to 5.85%, 18 month rate by 35 basis points to 6.2%, two-year fixed rate by 20 basis points to 6.4%, three year by 20 basis points to 6.9%, four year by 15 basis points to 7.3% and five year by 15 basis points to 7.6%.
On the term deposit front, the ANZ cut its five month term deposit rate by 50 basis points to 4.5%, their six month rate by 25 basis points to 4.25%, their nine month rate by 40 basis points to 4.6%, one year rate by 50 basis points to 4.6%, 18 month rate by 60 basis points to 4.8% and two year by 50 basis points to 5%.
National Bank cut its five month term deposit rate by 25 basis points to 4.25%, six month rate by 50 basis points to 4.5%, nine month by 40 basis points to 4.6%, one year by 50 basis points to 4.6%, 18 month by 60 basis points to 4.8% and two year by 50 basis points to 5%. See all term deposit rates for up to nine months here and see all term deposit rates for one to five years here.
(Updated with ASB's moves and interactive chart below of wholesale swap rates and background, Westpac's moves).
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