Sharechat Logo

ANZ, Westpac limit mortgage rate cuts, but Kiwibank goes all in

Thursday 11th August 2016

Text too small?

Two of New Zealand's major banks have rewarded savers more than borrowers in the wake of the cut to the official cash rate by upping the interest rate for deposits while making more modest reductions to mortgage rates.

Governor Graeme Wheeler cut interest rates to a record low of 2 percent from 2.25 percent. He later told a briefing that the central bank "would like to see most of it passed on; It's up to the banks to work out what they want to do - lower lending rates or attract more deposits through higher deposit rates." 

Westpac cut its floating mortgage rate by 10 basis points or 0.1 percent to 5.65 percent. The rate will be effective from the Aug. 12 for new lending and from Aug. 31 for existing borrowers. It has introduced a special six-month term deposit rate of 3.5 percent, a rise of 50 basis points or 0.5 percent. 

Earlier ANZ Bank New Zealand, the country's biggest lender, cut its floating mortgage rate by 5 basis points. Rates for commercial, agri and business lending were reduced 15 basis points, while at the same time it lifted some term deposits 30 basis points.

State-owned Kiwibank has moved to pass the rate cut on to borrowers to a greater extent. It has reduced its home loan variable rate by 0.2 percent to 5.25%, while its offset rate will fall by 0.25 percent to 5.25 percent and its revolving home loan rate by 0.2 percent to 5.3 percent. The rates will be effective from Aug. 15 for new customers and from Aug. 29 for existing borrowers. 

Bank of New Zealand and ASB Bank have yet to respond to the cut to the official cash rate. 

New Zealand's banks have raised deposit rates to try to secure greater domestic funding for the loans they issue, rather than borrow the money abroad, where the cost is more volatile and can be driven up by instability from events like Britain's vote to leave the European Union.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls with Aussie after Westpac's RBA rate cut call
Intuit juggernaut grows QuickBooks subscribers but momentum slows
Reaction to Budget rules relaxation shows balance 'about right', says Ardern
Augusta lifts net profit six fold as investors flock into new funds
Annual exports to China top $15 billion for first time
Gentrack posts $8.7M loss on CA Plus write-down
Westpac says RBNZ capital proposals would add $6,000 p.a. to an Auckland mortgage
Cavalier says market conditions still challenging
Ryman hikes dividend as annual earnings grow on wider development margin
24th May 2019 Morning Report

IRG See IRG research reports