ANZ has dropped its ‘special’ two-year fixed rate to 3.85%, and has introduced a six month ‘special’ rate of 4.49%. This follows Kiwibank’s announcement of a similar 3.85% two-year fixed rate ‘special’ last week.
ANZ’s ‘special’ interest rates require minimum 20% equity and an ANZ transaction account with salary direct credited.
The new rate is one of the lowest in the current market, beaten only by HSBC’s offer to its Premier customers of 3.79%, which is available across its one year, 18 month and 2 year fixed rates. However, Premier customers must have a minimum of $100,000 in savings and investments with HSBC New Zealand and a Premier loan must include a minimum $500,000 home loan value.
China Construction Bank also offers a 3.65% two-year fixed ‘special’ rate for loans under 80% LVR.
Kiwibank also dropped its two-year fixed rate ‘special’ on Saturday, a -14 bps reduction to 3.85%. The change took effect today.
The low interest rate environment continues to be highly favourable for borrowers, and with the Official Cash Rate (OCR) at a historic low, this doesn’t look set to change anytime soon. The majority of major banks including ANZ, ASB, Kiwibank and Westpac dropped their home loan rates soon after the OCR cut was announced in May, however economists have warned buyers to plan for higher interest rate costs over the long term.
ASB currently expects a follow-up OCR cut in August to 1.25%, but feels the risks are skewed towards a later move. Whether the OCR changes or not will depend on the tone of domestic data, currency value and developments in the global economy.