Banks slashing mortgage rates

ANZ's 4-year rate fell by 74 basis points from 6.49 per cent to 5.75 per cent while KiwiBank has reduced its 6-month offer by 20 basis points to 5.69 per cent from 5.89 per cent. Image: Thinkstock.

ANZ has slashed its mortgage rates following a similar move by KiwiBank as speculation grows that the Reserve Bank will cut the official cash rate next month.

ANZ's biggest move was in its 4-year rate, which was fell by 74 basis points from 6.49 per cent to 5.75 per cent.

Its one-year and two-year rates dropped from 5.99 per cent to 5.59 per cent
KiwiBank has reduced its 6-month offer by 20 basis points to 5.69 per cent from 5.89 per cent, according to interest.co.nz

Craigs Investment Partners analyst Mark Lister said the Government's newly announced tax crackdown on property speculators - combined with Reserve Bank's moves to combat house price inflation through lending restrictions on property investors - had increased the chances of the official cash rate moving lower.

"I think the chances of that happening have gone up significantly compared with where we were a week ago," Lister said.

"There's a whole lot of things that tell us the Reserve Bank should consider cutting the OCR but the big one on the other side is the Auckland property market and I think that's been the main hurdle [in cutting rates].

"Now that they're coming up with some other tools, on the Reserve Bank side and the Government side, that could open the door to them cutting rates."

The OCR has major influence on mortgage rates.