Westpac and ANZ cut home loan rates by up to 25 basis points as RBNZ lowers OCR to 2.5%

Westpac and ANZ cut home loan rates by up to 25 basis points as RBNZ lowers OCR to 2.5%

Westpac has followed ANZ, cutting its floating mortgage rates off the back of the Reserve Bank dropping the Official Cash Rate by 25 basis points to 2.50%.

However, although ANZ passed on the full -25 bps cut, Westpac is only passing on -15 of the -25 bps reduction to its clients on its main floating rate products.

Their Choices and Offset floating rates reduce from 6.00% to 5.85% while their revolving credit product Choices Everyday reduces to the same rate from 6.10%.

At the same time, it's knocked -15 basis points off its 2 Year Special fixed rate, taking it down to 4.24%, which is now the lowest two year rate offered by any bank.

Westpac's rate changes are effective for new customers on December 11, and existing customers on January 1.

ANZ has cut its floating home loan interest rates by -25 basis points to 5.74%, and its flexible home loan rate, also by 25 basis points, to 5.85%. The ANZ floating rate is now the lowest floating rate of any bank.

The new rates kick in for new ANZ floating rate home loan customers from December 14, but not until December 29 for existing floating rate and all flexible home loan customers.

See all banks' carded, or advertised, home loan interest rates here.

The new floating mortgage rates now compare across all banks as follows:

below 80% LVR Floating  1 yr  18mth  2 yrs   3 yrs   5 yrs 
    % % % % %
5.74 4.35 4.95 4.49 5.10 5.35
ASB 6.00 4.39 4.49 4.49 4.49 5.09
5.89 4.35 5.09 4.39 5.19 5.35
Kiwibank 5.65 4.49   4.49 4.85 5.35
Westpac 5.85 4.39 4.95 4.24 4.65 5.35
5.95 4.39 4.49 4.49 4.75 4.99
HSBC 6.10 4.25   4.49 4.99 4.99
HSBC 5.89 3.99 4.69 4.49 4.79 5.29
5.99 4.35 4.69 4.39 4.79 5.35

In addition, BNZ has a fixed seven year rate of 5.75%, while TSB Bank offers a fixed ten year rate also at 5.75%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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I went to a ANZ business seminar where they said
"look after your existing customers very well because it is 7 times harder to get a new customer than to keep an existing one"
They should heed their own advice, why do existing customer have to wait 2 more weeks to get the mortgage cut than new customers ?

Try one of the Kiwi owned banks, Kiwibank or TSB etc. Kiwi bank have much longer opening hours. They try a lot harder to look after their customers and the profits remain in NZ. So you benefit indirectly from this also; particularly in the case of Kiwibank which is government owned.

Banks, like petrol, take forever to drop, but go up almost instantly on a rise. What ever spin they make on this its hard to not see this as blatant self interest.

ANZ are screwing us over !

They traditionally make a margin of 33% on the cost of funds ( the OCR is the basic cost of borrowing from the RBNZ ) , so the floating mortgage rate should be around 3,5%, certainly under 4%, and certainly NOT 5,74%

You do realize that you can negotiate the floating rate?

Westpac are screwing us over worse - last two OCR cuts total 0.5% but they've only passed on 0.30% to floating mortgage holders!

It's almost like the big Aussie banks are only out to maximise profits and therefore return to shareholders (Aus)

Kiwibank is useless though. I am an existing customer and went to them to refinance $1.3m borrowing and 35% LVR, said it would take them two weeks to price up. ANZ, BNZ and Westpac came back within 1 day with pricing offers.

Told Kiwibank to forget it, heading back to ANZ now after three painful years at Kiwibank.

$4 billion in profit leaves NZ each year and Kiwibank is doing nothing to stem the tide.

some of the shareholders in the big 4 are kiwis, I have been since 2008 when they were cheap, also you will find many kiwisaver funds have them in their portfolio as its money for jam

Zoltluger - you think that a 50bps cut in the OCR brings a banks funding costs down by 50bps ?

No, Grant A. But I expect Westpac to at least match its competitors. Westpac is 6-11bps more expensive on its floating rate compared to the other big Aussies, and a full 20 bps more than Kiwibank

Happy happy... easier for first home buyers to finance their properties.
Oh by-the-way, all's still gonna be good in landlord land

this site needs some spamming software..

Ha ha rastus... well done, raised a laugh here.

Westpac 4.24% 2 year special not reflected in table above?

Updated now thanks sadr001.

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