- ASB has cut its 18-month fixed term loan rate to 5.39%, the lowest among major banks.
- All major banks now offer fixed term loans with interest rates under 6%.
- ASB, Westpac and BNZ’s six-month home loan rates now all at 5.99%, with competition expected to be fierce this year.
Kiwis are seeing interest rates almost in the “4s” again after ASB cut one of its most popular fixed term loans to 5.39%.
The bank revealed changes to three of its most popular rates a day after Westpac cut one of its key rates in a bid to match BNZ.
All major banks now offer a range of key fixed term loans with interest rates under 6%.
ASB’s cuts included reducing its 18-month fixed term to 5.39%, its six-month term to 5.99% and its one-year term to 5.59%.
The bank’s 18-month term is now the lowest offered by any major bank, with only Heartland Bank having a cheaper rate, according to Interest.co.nz.
ASB’s move follows on from Westpac yesterday announcing it was also cutting its six-month special home loan rate to 5.99% per annum as it looked to match the same rate from rival BNZ.
Westpac’s new rates became available to customers from today.
Other six-month special home loan rates include ANZ’s 6.24% p.a., and Kiwibank’s 6.15%.
Sarah Hearn, Westpac NZ general manager of product, sustainability and marketing, yesterday said the bank expected competition to attract home loans would be fierce again this year.
“While some economic uncertainty remains both domestically and overseas, homeowners rolling onto new fixed rates should start to feel the relief of lower repayments as the year goes on,” she said.
The last change to home loan rates was in November after the Reserve Bank cut the official cash rate (OCR) by 50 basis points to 4.25%.
The next monetary policy statement which sets the OCR is scheduled for February 19.
That raises a question among many mortgage holders about fixed term lengths and paying floating rates short term in the hope of cheaper rates after February’s OCR meeting.
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