ASB, on the heels of cuts from rivals Kiwibank and Westpac late last week, has cut all its fixed-term home loan interest rates by between 5 basis points and 40 basis points effective from tomorrow, November 2.
The cuts give ASB the lowest advertised 18 month, three year, four year and five year bank rates. See all advertised bank mortgage rates here. The new Co-operative Bank, formerly PSIS, also cut fixed rates and SBS Bank dropped its two year fixed rate.
However the cuts by banks to their fixed-term rates come at a time when nearly 60% of home loans by value are on floating, or variable, rates and the majority of customers taking up mortgages are choosing floating rates. BNZ chief financial officer Ken Christie said last week nearly all customers currently taking on home loans were choosing to float.
ASB is cutting its six month fixed rate by 10 basis points to 5.75%, its one year rate by 5 basis points to 5.80%, its 18 month rate by 30 basis points to 5.80%, two year rate by 30 basis points to 6%, three year by 40 basis points to 6.3%, four year by 35 basis points to 6.70%, and five year by 30 basis points to 7.10%.
“We are passing on the benefits of movement in wholesale funding rates to our customers," Catherine McGrath, ASB's executive general manager for strategy, payments and product, said. "Our fixed home loan rate reductions mean ASB now offers the most competitive 18 month, three, four and five year fixed rates among the major banks."
The bank's unchanged advertised floating, or variable rate, is 5.75%.
Separately, TSB Bank has now cut all its fixed-term rates for terms of 18 months to five years. TSB has dropped its 18 month rate 30 basis points to 5.85%, its two year rate falls 7 basis points to become the lowest one advertised by a bank at 5.88%, its three year rate drops 25 basis points to 6.45%, four year 60 basis points to 6.85% and five year is down 50 basis points to 7.25%. TSB's floating rate is 5.79%.
SBS Bank has cut its two year fixed term rate by 30 basis points to 6.15%. Its floating rate is 5.65%.
The Co-operative Bank, meanwhile, is cutting its 6-month, one, two three and four year fixed-term rates effective November 2. Its six month rate is dropping 5 basis points to 5.70%, its one year rate 10 basis points to 5.70%, its two year rate by 40 basis points to 5.90%, three year rate by 40 basis points to 6.40% and four year rate by 25 basis points to 6.80%. Its floating rate is 5.70%.
The Co-operative Bank from tomorrow is also cutting some of its longer term deposit interest rates by between 5 basis points and 20 basis points. And sister banks ANZ and National have cut all term deposit rates for terms ranging from 3 months in ANZ's case, or 90 days in National's, up to 18 months, but increased rates on some other savings products.
National Bank cut its 90 day term deposit rate by 25 basis points to 3.25% and ANZ cut its 3 month rate by 25 basis points to 3.25%. ANZ's five month rate, and National's 150 day rate, were both cut by 50 basis points to 3.25%. Their respective 18 month rates were cut by 15 basis points to 4.25%. See all advertised bank term deposit rates here.
ANZ has increased its Serious Saver total interest rate by 75 basis points to 4% and National Bank has hiked its eSaver total interest rate by 50 basis points to 4%.
(Updates add changes to ANZ & National Bank savings rates plus Co-Operative Bank, SBS Bank and TSB Bank rate cuts).