The Co-operative Bank announces floating rate cut from its already market-leading low, to under 6%. The change is immediate for new customers, but in two weeks for existing ones

It may still two full weeks before the next Reserve Bank Official Cash Rate (OCR) review on May 28, but one bank is jumping the gun with a 25 basis points (bps) floating mortgage rate cut.

Financial markets are pricing in a 25 bps cut from the Reserve Bank, an expectation that has held for many weeks.

Customer favourite Co-operative Bank has announced its 6.20% floating rate will fall to 5.95% on Thursday May 15 for new clients, and Thursday, May 29 for existing customers.

The last time there was a sub 6% floating rate offer from any bank was by Heartland Bank until February 2023. Most other banks were last lower than 6% in mid-2022.

A 5.95% rate is at least 50 bps lower than any other bank (main or challenger), and is within about 70 bps of the current fixed rates in the three to five year zone.

No doubt other banks are readying their rate announcements for when the Reserve Bank confirms its May 28 decision. Some have been known to jump up five to seven days ahead in previous cycles. But the Co-operative Bank's 14 day head-start in this case is unique.

This page tracks the current floating rate levels and will be updated as they come through.

If you are an existing customer, you can ask your bank to apply the reduction sooner than their effective date listed above. They should, because the delay is only because banks are under an obligation to give advance notice of a change. But that is only meaningful in the case of a rise. They will give a new client the lower rate immediately.

Serviceability test rates

To be updated when details are ascertained. See our tracking page here.

Along with falling mortgage rates, banks are also cutting savings account rates.