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By Gareth Vaughan
The mortgage and term deposit rate cuts undertaken by the banks over the past few weeks have been more generous to borrowers than it has hit savers in the pocket. However, the falls in swap rates have been bigger than the cuts made by banks to either benefit borrowers or slug savers.
Analysis by interest.co.nz shows that although the average advertised interest rates paid by the banks on minimum deposits of NZ$10,000 fell by between eight and 21 basis points for one to five-year terms, the average mortgage rate was cut by between 22 and 39 basis points on one to five-year advertised fixed-term mortgage rates between April 20 and June 1.
Over the same time period one to five-year swap, or wholesale, rates the banks themselves borrow at, fell by between 41 and 58 basis points.
Data collected by interest.co.nz shows the average one-year bank mortgage rate was 5.63% on April 20 and had dropped 33 basis points to 5.30% by June 1. Over the same time period the average one-year term deposit rate fell eight basis points to 4.41% from 4.49% and the one-year swap rate dropped 41 basis points to 2.38% from 2.79%.
Over a two-year timeframe the average mortgage rate fell 22 basis points to 5.59%, the term deposit rate 14 basis points to 4.70%, and the swap rate 48 basis points to 2.47%.
Over three-years the mortgage rate fell 31 basis points to 5.79%, the term deposit rate 15 basis points to 4.96% and the swap rate 55 basis points to 2.62%.
Over four-years the mortgage rate fell 33 basis points to 6.16%, term deposit rate fell 18 basis points to 5.17% and the swap rate dropped 57 basis points to 2.83%.
Over five-years the mortgage rate fell 39 basis points to 6.51%, the term deposit rate fell 21 basis points to 5.42% and the swap rate 58 basis points to 3.03%.