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UPDATED: Six banks cut home loan rates

Friday 5th December 2008

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Six banks have already responded to the Reserve Bank’s 150 basis point OCR cut today.

SBS has made the biggest change, knocking 195 points off its floating rate, taking it to 7.20%.

Kiwibank has reduced all its home loan rates, while ASB Bank has cut 75 points off its floating rate, bringing it down to 7.95%.

SBS now has the lowest floating rate in the market, 25 points less than its nearest rival Kiwibank. The lowest "big bank" is ASB on 7.95%. All the other banks have standard rates of 8.70% or higher.

“SBS Bank is able to pass on the full benefits of the OCR reduction and more because we are not affected by the increased cost of borrowing offshore, which has been a result of the global credit crunch," SBS Bank chief executive Ross Smith says.

Kiwibank’s one-year fixed rate is 6.49% and its variable rate is down to 7.45%.

“The bank had made significant cuts to its rates in late November in anticipation of the move by the Reserve Bank,” Kiwibank chief executive Sam Knowles said.

“The decision by the Reserve Bank to make a cut of 1.5% gives Kiwibank room to pass on further savings to those with home loans.”

“In the space of two weeks we have been able to bring down our variable rate from 8.70% to 7.45%. We have also brought the key short-end fixed rates below 7.00%.”

These are the lowest rates Kiwibank has had in the past four years.

Westpac is now the fourth bank to pass on the OCR cut. Westpac now has the lowest 18-month and two-year rates on our table at 6.79% and 6.85% respectively.

TSB, BNZ and Sovereign have all come through with rate changes overnight. TSB has cut rates across the board and Sovereign and BNZ TotalMoney have reduced floating rates only and BNZ Classic six-month rate has gone down to 6.49%.

To check and compare rates click here

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