A wave of interest rate cuts have followed from a number of lenders after the Reserve Bank’s surprise cash rate cut to a record low of 2.25% on Thursday.
The Co-operative Bank was the first to make a rate cut, dropping its floating rate by the full 25 basis points to 5.45%. Kiwibank has since dropped to the same rate, cutting by 20 basis points and also made cuts of between 10 and 36 basis points to its three, four and five-year fixed home loan rates.
ANZ lowered its floating and flexible home loan rates on Thursday by 10 basis points to 5.64% p.a. and 5.75% p.a., respectively. The floating rates for new customers are effective today and the floating and flexible loan rates for existing customers will be effective 29 March.
“Over the last 18 months, offshore wholesale funding costs have increased significantly. Until now, and unlike some other banks, ANZ has passed on all the recent OCR rate cuts in full. But international volatility has proved to be more than temporary so these extra costs now need to be reflected in our lending rates,” ANZ said in a release.
On Friday ASB lowered its variable home loan rate by 20 basis points from 5.75% p.a to 5.55% p.a., effective March 16 for new customers and March 24 for existing customers.
ASB also dropped its one-year fixed interest rate special by 0.24% p.a. to 4.15% p.a and the carded rate by 0.16% to 4.69%. The two-year fixed interest carded and special rates will both be cut by 0.10% to 4.89% and 4.39% respectively.
ASB executive general manager retail Ian Park says ASB is pleased to offer borrowers a range of reductions and market-leading fixed rates.
“These latest reductions provide very competitive options for customers,” Mr Park says.
Westpac also dropped its floating rate by 10 basis points to 5.75%.
BNZ has confirmed it doesn’t intend to pass on the OCR cut, according to Fairfax Media.
"We don't have any changes to announce at this stage but we are constantly reviewing interest rates," BNZ's director of retail and marketing Craig Herbison, said in a statement.
"There are a range of factors that impact if a bank increases or decreases its interest rates. The OCR is one of them. Equally, one other consideration is the rising cost of wholesale funds due to a more volatile off shore market."
Bruce McLachlan, chief executive of the Co-operative bank told Fairfax Media he believed his larger rivals should be passing on the savings.
"I don't think it's justified to not pass on the whole amount. We're all operating in the same market. We believe we've done the right thing by our customers and our business," McLachlan said.
ANZ lowered its floating and flexible home loan rates on Thursday by 10 basis points to 5.64% p.a. and 5.75% p.a., respectively. The floating rates for new customers are effective today and the floating and flexible loan rates for existing customers will be effective 29 March.
“Over the last 18 months, offshore wholesale funding costs have increased significantly. Until now, and unlike some other banks, ANZ has passed on all the recent OCR rate cuts in full. But international volatility has proved to be more than temporary so these extra costs now need to be reflected in our lending rates,” ANZ said in a release.
On Friday ASB lowered its variable home loan rate by 20 basis points from 5.75% p.a to 5.55% p.a., effective March 16 for new customers and March 24 for existing customers.
ASB also dropped its one-year fixed interest rate special by 0.24% p.a. to 4.15% p.a and the carded rate by 0.16% to 4.69%. The two-year fixed interest carded and special rates will both be cut by 0.10% to 4.89% and 4.39% respectively.
ASB executive general manager retail Ian Park says ASB is pleased to offer borrowers a range of reductions and market-leading fixed rates.
“These latest reductions provide very competitive options for customers,” Mr Park says.
Westpac also dropped its floating rate by 10 basis points to 5.75%.
BNZ has confirmed it doesn’t intend to pass on the OCR cut, according to Fairfax Media.
"We don't have any changes to announce at this stage but we are constantly reviewing interest rates," BNZ's director of retail and marketing Craig Herbison, said in a statement.
"There are a range of factors that impact if a bank increases or decreases its interest rates. The OCR is one of them. Equally, one other consideration is the rising cost of wholesale funds due to a more volatile off shore market."
Bruce McLachlan, chief executive of the Co-operative bank told Fairfax Media he believed his larger rivals should be passing on the savings.
"I don't think it's justified to not pass on the whole amount. We're all operating in the same market. We believe we've done the right thing by our customers and our business," McLachlan said.
