Westpac cuts mortgage rates, floating unchanged

Westpac has lowered its one year, 18 month, and two year mortgage rates, effective from tomorrow morning, but has again left its variable rate unchanged despite the 50 basis point cut in the Official Cash Rate on April 30.

Westpac's one year rate will be reduced by 30 basis points (bps) to 5.40 per cent; the 18 month rate by 21 bps to 5.89 per cent; and the two year rate by 10 bps to 6.25 per cent.

Two weeks ago, following the cut in the Official Cash Rate to 2.5 per cent by the Reserve Bank, Westpac cut its six month mortgage rate by 40 bps to 5.39 per cent.

Westpac reported last week that its net interest margins had increased to 225 basis points in the six months to March 31 from 216 basis points in the six months to the end of September, meaning it may have had a bit more room to cut rates than other banks in New Zealand, which have argued that higher international funding costs are stopping them from cutting mortgage rates. Term deposit rates have been largely left unchanged.

As of yet, no bank has cut a variable mortgage rate following the OCR cut. Last Thursday, ANZ National cut its six month rate by 34 bps to 5.45 per cent, and its one year rate by 29 bps to 5.50 per cent.

TSB announced on Tuesday morning it was cutting its six month mortgage rate by 35 bps to 5.64 per cent, and its one year rate by 9 bps to 5.70 per cent. SBS also cut six month and one year rates by 29 bps to 5.50 per cent and 7 bps to 5.70 per cent, respectively.

Meanwhile, building society CBS Canterbury increased its two and three year mortgage rates by 15 bps to 6.40 per cent and 6.95 per cent, respectively.


- INTEREST.CO.NZ