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Mortgage rates could be in for another step down, with Kiwibank suggesting further easing within the next few weeks.
State-owned Kiwibank led the recent falls in rates, when late last month it cut its two-year lending rate to 9.29 per cent from 9.60 for borrowers with at least 20 per cent equity in their purchase.
The main banks have played catch up since Friday, with Westpac Bank, ANZ National Bank and ASB's two-year rates now at 9.4 per cent, while BNZ has its "classic" two-year rate at 9.29 per cent.
Wholesale rates fell dramatically last Thursday when a jobs report showed 29,000 jobs were lost in the March quarter. Money markets rallied 22 basis points as they pre-empted an official interest rate cut by the Reserve Bank.
The two-year swaps market staged the biggest rally in two years with rates dropping as low as 7.73 per cent from 7.97 per cent.
Economists said last week's jobs data dramatically pulled forward the prospects of the Reserve Bank moving into an easing cycle.
Today Kiwibank chief executive Sam Knowles said he thought there was a chance of "some more easing (in mortgage rates) over the next few weeks".
"Certainly when the opportunity comes to pass it on, we will pass on additional benefits and certainly our view is that that will be sooner rather than later," Mr Knowles told Radio New Zealand.
"Obviously if we lead we think the others will probably follow. The margins are still quite large in a historic sense and there's not necessarily any reason for them to stay as large as they are."
But even as the mortgage market is offering hard pressed households a sniff of relief from relentlessly rising prices, a new report has pointed out how much less tax Australians pay compared to New Zealanders.
Deloitte managing tax partner Thomas Pippos said a single person on $30,000 would have a 37 per cent cut in tax if they moved to Australia, The Dominion Post reported today.
If a worker earns $100,000, they would save 10 per cent in tax in Australia, rising to 22 per cent in five years as a result of planned tax cuts confirmed in the Australian budget on Tuesday.
Middle-income earners in Australia are taxed at 30 per cent up to A$75,000, and in this country it is 33 per cent up to $60,000, after which a 39 per cent rate kicks in.
In this country the Government is expected to announce tax cuts worth $1.5 billion to $2 billion next week, equal to perhaps $20 a week.
- NZPA
