Kiwibank first to cut rates after Bollard warning

Kiwibank has cut its 2 year mortgage rate by 10 basis points to 6.09 per cent, the lowest 2 year rate now offered by a bank.

It is the first move by a bank to cut its long term rates after Reserve Bank Governor Alan Bollard warned last week that long term wholesale rates had risen too far and will put the pressure back on the big banks to follow.

Kiwibank also cut its 6 month rate by 20 basis points to 5.79 per cent, bringing it in line with ANZ National, SBS and Westpac.

The lowest 6 month rates are still 5.50 per cent offered by ASB and BNZ and 5.45 per cent offered by ASB cousin, Bankdirect.

Kiwibank said its new 2 year rate was now only available for home loans where a borrower had at least 20 per cent equity in the value of the property provided as security.

Previously Kiwibank's 'special' 20 per cent deposit rate was for 1 year. Otherwise an additional 0.20 per cent will be added onto the rate. The rate changes are effective today.

INTEREST.CO.NZ