Thursday 10th March 2011
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ASB, BNZ, Westpac, ANZ, National Bank and Kiwibank moved quickly this morning cutting their floating rates by 50 basis points after the Reserve Bank announced it had reduced the official cash rate (OCR) from 3.00% to 2.50%.
These changes follow reductions in fixed mortgage rates last week, making the major bank medians for floating, six-month and one-year rates all below 6%.
ASB has reduced its floating rate to 5.75% to be effective from March 11 for new borrowers and from April 4 for existing borrowers.
ASB chief executive customers, markets and products Catherine McGrath says the terrible tragedy in Christchurch will have far reaching consequences, not only for its customers in that region, but for the whole community and the wider economy.
"While the OCR is just one factor that we consider when setting our interest rates, we hope that by dropping our variable lending rates now we can assist the Reserve Bank to alleviate the new financial pressures now confronting so many New Zealanders."
BNZ has reduced its Total Money rate to 5.59%, its Standard, GlobalPlus, Rapid Repay and Fly Buys floating rates to 5.99%, and its Mortgage One rate to 6.40%.
It has also cut its six-month Standard, Fly Buys and GlobalPlus rates by 45 basis points to 5.85%
BNZ treasurer Tim Main says that since the global financial crisis (GFC), the average cost of bank funding, particularly deposits and term wholesale funding, has been continually increasing.
“Regulatory changes are requiring all banks to hold more expensive, but more stable forms of funding. BNZ will need to take account of these costs when adjusting lending rates in the future.”
Kiwibank’s floating rate has been cut to 5.65%, which is immediate for new customers and effective in two weeks for existing customers.
Kiwibank Chief Executive Paul Brock said there had been strong signals that the cut would be made and Kiwibank had made preparations to react immediately.
Westpac says its move will now see the everyday floating rate at 5.60% and the floating rate at 5.75%.The rates are effective from tomorrow for new customers and from March 31 for existing customers.
Westpac economist Dominick Stephens says Westpac concurs wholeheartedly with the RReserve Bank's assessment, and takes the Reserve Bank at its word that the OCR will rise rapidly in 2012.
"At the margin, we'd favour an even steeper yield curve than the market has so far delivered."
ANZ and National Bank's have dropped their floating rates to 5.74% which will come into effect for on March 12 for ANZ new customers and on March 14 for National Bank's new customers. Existing customers will see the rate come into effect from March 28 for ANZ and from March 29 for National Bank.
The ANZ and National Bank Flexiplus rate has also been reduced to 5.65%, to come into effect from March 28, for ANZ new and existing customers and from March 29 for National Bank new and existing customers.
SBS Bank has dropped its rate to 5.65% and general manager finance Tim Loan says SBS knows today’s announcement will provide another form of relief to many who have been negatively impacted by the Christchurch earthquake.
“We cannot anticipate how long-term New Zealand will be fending off the economic impact of the earthquake, but the immediate priority for SBS Bank is to provide our customers with every bit of support during this time.”
To see all of the changes on the www.mortgagerates.co.nz table, click here.
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