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Kiwibank reduces mortgage rates after OCR slashed

Thursday 23rd October 2008

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Kiwibank cut its variable home loan rate 100 basis points to 8.7% following the central bank's decision to lower the official cash rate by the same amount.

The reductions are part of Kiwibank's strategy to be "slow to rise, but fast to fall" with mortgage borrowing rates, chief executive Sam Knowles said in a statement.

Kiwibank also reduced its premium two-year rate to 7.79% and its one-year rate to 7.99%. The reductions follow Reserve Bank Governor Alan Bollard's decision to cut the OCR to 6.5% in the biggest drop since the benchmark was introduced in 1999.

He cited the prospects of a global economic slump and the likelihood inflation will slow to within the central bank's 1% to 3% target range by mid-2009 when cutting rates today.

By Jonathan Underhill

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