ANZ has trimmed down all of its ‘special’ home loan rates, and has come out with two new market-leading rates for its one and 18-month terms.
Its one year fixed rate is now 2.55%, on a level with the rate offered by the Bank of China.
Its 18-month rate has been dropped to 2.65%, which now matches the 18-month rates offered by ASB, HSBC, Bank of China and China Construction Bank.
Read more: ANZ drops one year fixed rate to “historic low”
ANZ’s six month rate has been dropped to 3.55%, its new 2-year rate is 2.69%, and its 3-year rate is now 2.79%.
So far, no other bank has followed Kiwibank’s substantial 1% cut to its floating rate.
Rates have been dropping steadily across the board since the Reserve Bank of New Zealand announced a 0.25% OCR for the foreseeable future.
Global Finance founder Ajay Kumar says he would not be surprised to see mortgage rates fall below 2% over the next year, which he says will give customers a great chance to get a better deal on their mortgage. However, he says house prices have not fallen as some may have hoped, given that demand for homes is still largely unchanged.
Read more: Buyer demand continues to soar
“The low interest rates are supporting the housing market,” Kumar said. “But instead of ten people in the queue for a property, now you might have four people in the queue - so realistically, demand is still far more than supply.”
“The only moderator at the moment is the tight lending criteria of the banks,” he explained. “But if you look at June 2020, we have not seen much decline in value. If demand remains more than supply and people remain ready to look for loans from banks, prices simply won’t be able to come down.”