Two year home loan war ending

Saturday 18th December 2004

Borrowers are facing significantly higher interest rates as the intense battle by lenders to win business in the home loan market comes to an end.

Bank of New Zealand which started the war by offering what it called an "unbeatable" two year home loan rate finished that promotion on Friday afternoon. While BNZ have not yet indicated where it will set its two-year rate on Monday other banks and lenders have been quick to move.

Westpac made its intentions clear on Monday that the "unsustainable" price war had to end. It moved its 18 and 30 month rates up more than 40 points each on Friday to 7.40% and 7.65% respectively.

The National Bank has moved just its two year rate from 7.05% to 7.60%.

ASB Bank also moved on Friday setting all its fixed rated at 7.70%. Meanwhile sister company Sovereign set all its fixed rates at 7.85%.

Just to add some confusion to the picture a number of non-bank lenders have dropped their one and two year rates, meaning that the spread between rates on offer in the market is beginning to narrow. Organisations to move include Asteron, Cairns Lockie, General Finance, Pacific Home Loans, Premier and Wizard.

To compare all the rates on offer go to Good Returns Mortgage Rates page here

The following table shows some of the rate changes.

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