Mortgage rate war reignited: another bank cuts rates below 3%

by Ksenia Stepanova22 May 2020

ASB has announced that it is cutting all of its key home loan rates, and has reduced its two-year special rate to a new low of 2.69%.

The announcement comes hot on the heels of yesterday’s decision from ANZ to drop its one year fixed-term rate to 2.79%, reigniting the mortgage rate war of the last few years which saw banks slowly inching closer to rates of 3%.

Read more: ANZ drops one-year fixed rate to “historic low”

ASB executive general manager retail banking Craig Sims says its new rate will be “welcome news” to home owners and first home buyers.

“This new rate is incredibly competitive, and we’re proud to be doing our part to support our customers on their home ownership journey,” Sims said.

“We hope this will help them manage their home loans, or enable others to be in a position to get into their first home.”

“This has been an incredibly challenging period for a lot of our customers, and we’re doing everything we can to support them and make things a little bit easier,” he added. “We’re confident these new rates will help with that.”

ASB is also reducing all of its fixed term rates by various bps. The changes are effective from Saturday 23 May, and lending criteria and conditions apply. Like ANZ, ASB has not yet specified how long the rates will be available for.

The full list of changes is as follows:

  •  6 months special 3.55% (-34bps); carded 4.05% (-34bps)
  • 12 months special 2.85% (-20bps); carded 3.35% (-20bps)
  • 18 months special 3.05% (-20bps); carded 3.55% (-20bps)
  •  24 months special 2.69% (-30bps); carded 3.19% (-30bps)
  • 36 months special 3.35% (-34bps); carded 3.85% (-14bps)
  • 48 months special 3.45% (-34bps); carded 3.75% (-14bps)
  • 60 months special 3.55% (-34bps); carded 3.49% (-14bps)

“It’s been encouraging to see the country start to re-open and New Zealanders be able to return to work, but we’re conscious that the impacts of COVID-19 will still be felt for a while to come, and we will continue to help our customers through that. Our new special two-year low rate is part of this,” Sims said.

“We know this is still an extraordinarily stressful time for Kiwis, despite moving down alert levels, and we want our customers to know ASB is here for them. We have been doing our best to help support their financial wellbeing and will continue to do so.”

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