BNZ has announced it won’t be making any changes to its interest rates today, following the Reserve Bank’s decision to cut the official cash rate this morning.
The bank’s acting director of retail and marketing, David Bullock said it was important for people to keep in mind that interest rates aren’t directly or solely linked to the cash rate.
“Banks get their ability to lend from a few sources, most of which are getting more expensive and putting pressure on margins,” said Bullock. “One source is local deposits, and at the moment there are more people wanting home loans than there are people saving.
“So to encourage and attract more deposits (people’s savings and terms deposits) we need to pay a sharper return to savers. And we still need overseas funds to fill the gap – and the cost of these remains volatile.
“All those factors considered, it’s still important to remember that today’s interest rates for home loans are still some of the sharpest in decades and still a good time for people with home loans to look at ways to pay off their loans faster.”
BNZ recently increased its three year fixed term classic home loan by 10 basis points to 4.59% p.a, on Tuesday this week.