BNZ is the latest bank to cut another key mortgage rate and has announced a two-year fixed rate of 3.54%, -5pbs below ANZ, ASB, Kiwibank and Westpac’s offerings for the same term.
BNZ has also dropped its residential investor rate down to 3.79%.
The only lower two-year fixed rates now come from HSBC Premier and China Construction Bank, which are offering 3.35% and 3.19%, respectively.
HSBC cut its rates across all of its terms earlier this month and was the second bank to offer a four and five-year rate below 4%, however its rates are only available to customers with a minimum of $500,000 in loans or $100,000 in savings or investments.
Mortgage rates have been steadily creeping down since the Reserve Bank’s aggressive OCR cut of -0.50 in August, and another cut has been pencilled in by economists for November. ASB says it would take a “material surprise” to the GDP for the Reserve Bank to consider a September cut, but expects another 25bp OCR cut at the November Monetary Policy Statement.
“We expect the RBNZ to cut the OCR at least once more this year, most likely in November,” ASB senior economist Jane Turner stated in the bank’s latest economic note.
“The aggressive 50bp OCR cut in August pre-empted a certain amount of ‘bad’ economic news, including muted GDP growth over Q2.
“The RBNZ expects annual growth to fall to 2%, so it will likely require a material downside surprise to prompt the RBNZ to cut the OCR another 25bp as soon as the September OCR review. Rather, we think the RBNZ will likely take some additional time to assess the impact of the recent rate cuts on business and consumer confidence – in particular – and the economic outlook in general.”