ASB will cut its floating mortgage rate by 20 basis points to 5.55% in response to the Reserve Bank's 25 basis points Official Cash Rate cut.
At the same time, it's chopping its fixed rates across the board.
These changes are effective March 16 for new customers and March 24 for existing customers.
(Update: A previous version of this story had an error in the effective dates of rival banks, as did the table below. This update corrects those mistakes.)
ASB is not giving any reason for holding on to the 5 bps, presumably content to hide behind the ANZ and Westpac announcements.
Their PR focus is on trumpeting the fixed rates reductions, many of which are challenging for their rivals.
Taken as a whole, these ASB reductions do challenge the ANZ and Westpac contention that "higher wholesale costs" mean withholding 15 bps is a necessary business decision.
We doubt it is justifiable, and will offer our opinion tomorrow morning.
But the fact that minnow Co-operative Bank can pass the full 25 bps cut through, a bank that has no wholesale funding, tells a lot.
Here is where the fixed rates stand after the ASB reductions:
|below 80% LVR||1 yr||18mth||2 yrs||3 yrs||4 yrs||5 yrs|
In addition, BNZ has a fixed seven year rate of 5.90%, while TSB Bank offers a fixed ten year rate at 5.75%.