The Co-operative Bank gets in ahead of expected OCR cut by dropping its floating mortgage rate plus 3, 4 and 5 year rates

The Co-operative Bank gets in ahead of expected OCR cut by dropping its floating mortgage rate plus 3, 4 and 5 year rates

The Co-operative Bank is getting in ahead of an expected cut to the Official Cash Rate (OCR) on Thursday by lowering interest rates on its floating, three, four and five year home loans.

The bank is reducing its carded, or advertised, floating rate by 25 basis points to 6.20%. The only bank with a lower advertised floating rate is ICBC NZ at 6%. The Co-operative Bank is also reducing its three-year rate by 15 basis points to 5.20%, its four-year rate by 15 basis points to 5.40%, and its five-year rate by 10 basis points to 5.59%.

The new, lower rates will be available to new and existing Co-operative Bank customers from Tuesday July 21, and the floating rate will be reduced for existing customers on 6 August.

Co-operative Bank's new three-year rate is the lowest "standard" rate for this term from a bank with SBS Bank having a 4.99% "special" rate, the new Co-operative Bank four-year rate is the lowest from a bank, and the five-year rate is equal lowest with SBS.

Co-operative Bank CEO Bruce McLachlan noted banks usually cut floating rates after the Reserve Bank lowers the OCR rather than before. The Reserve Bank is expected to the cut the OCR by 25 basis points to 3% on Thursday.

“It may seem like an unusual step, but The Co-operative Bank isn’t like other banks,” McLachlan said. “When you’re owned by your customers, your focus is solely on what’s best for them. In the current uncertain environment, regardless of the Reserve Bank’s decision, we believe that reducing home loans rates is absolutely the best thing to do for our customers.”

McLachlan said global uncertainty and dramatic dairy price falls have weakened the New Zealand economy’s immediate prospects and added some risks to employment and income levels.

“This is a time when our customers need us to act in their best interests and move quickly. Home buyers must be careful not to over commit themselves, and we think this will help.” 

Banks also usually cut deposit and other savings rates when the OCR is lowered. However, the Co-operative Bank made no mention of this in its statement.

The new Cooperative Bank floating and fixed mortgage rate compares as follows this Monday morning:

below 80% LVR Floating  1 yr  18mth  2 yrs   3 yrs   5 yrs 
    % % % % %
6.24 4.89 5.55 4.99 5.59 5.79
ASB 6.50 4.89 5.25 5.10 5.39 5.65
6.34 5.19   4.99 5.29 5.75
Kiwibank 6.15 4.89   4.99 5.39 5.60
Westpac 6.40 5.39 5.39 4.89 5.49 5.79
6.20 4.89 4.99 4.99 5.20 5.59
HSBC 6.60 4.89   4.89 5.29 5.60
6.39 4.99 4.85 4.99 4.99 5.59
6.49 5.45 5.59 4.99 5.40 5.85

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was offered 3.5K cash with a 4.85% fixed for 6m or a 4.8% fixed for a year.

I accept the cash part but chose to stay float at 5.69% and wait for 23 July, then September.

Which bank offered you $3,500 cash?

Cannot say it here. I'd encourage you to setup a website where ppl can anonymously submit their mortgage info - type of mortgage, size, rate, term and cashback. This info reflect much better reality than what banks say/advertise in public.

What rubbish. There's nothing stopping you posting it here...

Last week KB offered me $3,500 and 4.74% for 2 years and 0.50% off floating. Carded rates are only benchmarks!

How much borrowed? LVR? New or existing customer?

Cool personal blog post xingmowang.

Does any1 know of any Bank offering cash to stay with them (existing customers?) All I have found is cash incentives if I am a new customer...

Anyone knows if banks give cashbacks to existing customers?

Westpac and TSB will. Be prepared to walk, but they will cave.

All of them I imagine - its a competitive market. If you want a picture of their mother they will probably throw that in as well. Most of the agents have an ambition to be RE reps.

Yes if you ask and say what other banks are offering you. I got $1k from my bank when I refixed for 12 months last year.

Gold - $1080 this morn in HK.

I have seen 4k offers for retaining business for two years, couple with discounted interest rates. I think the first poster is not tell the full one will offer you cash without a lock in period.

So it's possible to do better than the 4.89 two year fixed rate by Westpac etc?
And should you wait for the next 2 cuts anyway?

The rule of thumb for cashback is 1k for every 100k borrowed, supposedly. I guess there is a maximum though. Does this sound about right?