[CORRECTION: An earlier version of this story failed to identify that TSB has the lowest 2 year fixed home loan rate of 5.80%.]
ASB has cut some home loan fixed rates.
They have reduced their standard one year fixed rate by 10 bps to 5.85% from 5.95%.
And they have added a 'new' two year Special at 5.89%, with conditions.
Their standard two year rate is 6.19%, so the special involves a reduction 30 bps.
It applies to new and existing lending for customers who have at least 20% equity (i.e. a Loan to Valuation Ratio of less than or equal to 80%), an ASB credit card and have salary or wages credited to their main transaction account with ASB.
The new two year special rate is in addition to their other existing three year fixed special of 6.25%.
“These new rates provide customers with ... greater rate certainty over the medium term as we approach the Reserve Bank’s review of the Official Cash Rate on 12 June,” said Shaun Drylie, ASB General Manager of Product and Strategy.
The combination of soft wholesale rates and a sluggish mortgage market may see a more intense period of bank competition leading up to the next expected RBNZ rate hike.
Earlier in the afternoon, Kiwibank beat ASB to the punch, launching a 5.85% two year special. If that hadn't happened, ASB would have had the lowest rate for that term. But now they don't. TSB have the lowest 2 year rate of 5.80%.
BankDirect made the same rate move as ASB. Sovereign followed with the one year reduction and has now but has not adopted the two year Special also at the same 5.89%.
See all banks' carded, or advertised, home loan rates here.
This is how these new ASB rates compare:
| below 80% LVR | 1 yr | 18 mths | 2 yrs | 3 yrs | 5 yrs |
 |
5.95% | 6.19% | 5.99% | 6.55% | 7.40% |
 |
5.95% | 5.99% | 5.89% | 6.25% | 7.40% |
 |
5.85% | 5.99% | 5.95% | 6.25% | 7.40% |
| Kiwibank | 5.85% | 5.85%* | 6.29% | 7.20% | |
 |
5.95% | 6.14% | 6.19% | 6.25% | 7.40% |
| Co-op Bank | 5.85% | 5.85% | 5.99% | 6.25% | 6.99% |
 |
5.59% | 5.99% | 5.99% | 6.99% | |
 |
5.60% | 5.85% | 5.99% | 6.25% | 6.79% |
| TSB | 5.70% | 5.85% | 5.80% | 6.25% | 7.40% |
* only as part of their 60/40 'special' deal. Otherwise 6.19%.
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