Five days after hiking fixed-term home loan rates, 'nimble' ASB cuts them to reflect 'wholesale funding market movements'

Five days after hiking fixed-term home loan rates, 'nimble' ASB cuts them to reflect 'wholesale funding market movements'

ASB, which was the only major bank to hike all its one to five year fixed-term home loan rates last week, says it's now cutting one to five year fixed rates by between 25 basis points and 35 basis points and in all bar one case is giving back more than it took.

ASB says the cuts are effective from tomorrow, Tuesday August 9, and are a "swift response" to  wholesale funding market movements. For its one, two, three, four and five year rates ASB has cut to levels lower than they were at prior to last week's hikes. However, the bank has reduced its 18 month rate to 6.10%, above the 6% it was at prior to the August 3 hike.

ASB is now the market leader for 18 month, three, four and five year rates. See all bank mortgage rates here.

The cuts include a 25 basis points reduction in the one year rate to  5.90% per annum, a 30 basis points reduction in the 18 month rate to 6.10%, a 35 basis points cut to the two year fixed rate to 6.30%, a 25 basis points cut to the three year rate to 6.70%, a 30 basis points cut to the four year rate to 7.05%, and a 35 basis points cut to the five year rate to 7.40%. The fixed-term six month rate is unchanged at 5.85%.

“We are committed to responding in a nimble fashion to wholesale funding market rate movements, therefore providing our customers with highly competitive interest rates on their home loans,” said Catherine McGrath, ASB's chief executive for customers, markets and products.

The bank's floating, or variable, home loan rate is 5.75%.

Before last week's hikes, ASB offered a 5.95% one year rate, 6% 18 month rate, 6.40% two year rate, 6.90% three year rate, 7.30% four year rate, and 7.60% five year rate. That leaves its one year rate 5 basis points lower than it was prior to last Wednesday's hike, its two year rate 10 basis points lower, three year rate 20 basis points lower, four year 25 basis points lower, five year 20 basis points lower, but 18 month 10 basis points higher.

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Big hearted Bills at ASB, for backing the truck up so quick, oops

Hope they hadn't rolled out the advertising package for the new (now old) rates


We at ASB will be increasing our fixed,no, hang on.....we're lowering them again. In fact, we don't know if we're Arthur or Marthur.  

Dear ASB & other bank economists,

There is a big world out there beyond NZ.  That world is in serious trouble.

Forget about your interest rates increasing for a long long time. Hope you didn't scare too many customers into fixing at current rates.

yours truly,  

not fooled by threats of rate increases.



Do you guys actually understand what drives retail interest rates - in case you didnt its wholesale interest rates, and if you also didnt know, they went up and they went down again, so wheres the ASB at fault here ?

If you did know that then I feel honoured that you contribute here because clearly you know exactly when both will occur and are therefore extremely rich !

Oh Grant A you lovely little piglet, getting your little snout right up close to the big, nasty banky CEO pig, after so long with it squarely up his butt.  Get in ther little piglet for you never know the trough may dry up and the bankies might have to take a very nasty hair-cut - now that would be a great day when all those pigs are slaughtered and turned into bacon by the masses!!!!!!

Well said Grant A

When you go back into work today you will be able to proudly say to your CEO at the Bank at which you probably work that you have stood up for them and that you will gladly receive your "bonus" from the huge profits currently being made by your employer from the excessive margins they are currently routing the mum and dad borrower with.

but seriously, agree with MortgageBelt the banks need to pull their heads in and take a deep breath instead of gouging us every chance they get.  Things are way too volitile world-wide for any rate increases and they should just shut it and watch.  They could also get their chief economists out of the public eye and give them a decent pay cut such is the quality of their analysis and predictions - spruikers, detest them!!!

"Renting, might just be the way to go"   Your joking! ;)  Even the Aussie are finally 'getting it'.

ASB's parent CBA has now cut fixed rate mortgages by up to 60bp -

Cutting, cutting, cutting  -   Rates are going to be cut not raised ...

Australia's money market is pricing in almost 160 basis points of cuts to the official 4.75 percent cash rate in the next 12 months.

Later in the morning, Westpac followed suit, saying it  has cut the interest rate on its three-year fixed rate home loan by 20 basis points.

Read more:

That's because the Aussie pollies (just like ours) will use any excuse to maintain their property bubbles and save the banks.  Note that they will use the line that it is to save the taxpayers (from themselves) who have all their wealth tied up in houses.


Whatever the reason  -  that's going to be the reality. 

Cuts not hikes.     Get used to it for a long recessionary time ....


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