KEY POINTS:
Kiwibank is the first of the main banks to drop home loan rates following the Reserve Bank's decision to cut the official cash rate by 150 basis points to 3.5 per cent.
Kiwibank's lowest rate is the one-year fixed-term, which is down 0.3 per cent to 5.69 per cent. Its two-year has dropped one per cent to 5.99 per cent and the floating rate is down 0.5 per cent to 6.49 per cent.
Westpac has also cut rates today, saying its floating rate would reduce from 7.49 per cent to 6.89 per cent and its one year rate from 6.8 per cent to 5.79 per cent.
Chief Executive Sam Knowles says Kiwibank is determined to keep leading the market and pushing through savings for customers as soon as possible. Farmers have been complaining that banks are milking business customers by keeping their rates high but Mr Knowles denies the accusation. He says Kiwibank has been pushing through savings for all customers.
"Our business rates are probably the most competitive in the market and we've continued to bring them down. In business, everyone has an individual rate according to their risk and we've certainly brought them down significantly this year."
Reserve Bank Governor made special mention of banks in his statement this morning. He told financial institutions he expects them to lower their lending rates, although he did not state what the rates should be.
"This isn't Muldoon days. The Government doesn't tell the banks what the interest rate ought to be. It's a comment about the direction and behaviour rather than a comment about levels. We do not tell the banks what rates they should be setting."
- NEWSTALK ZB/NZPA
