Mortgage rate cut merry-go-round: ANZ and BNZ make big cuts to home loan rates

BNZ is cutting more of its home loan rates. Photo / Alex Burton

The mortgage rate cut merry-go-round continues with two major banks today dropping their lending rates.

From tomorrow, BNZ’s standard fixed six-month home loan rate will drop 26 basis points (bps) from 6.75% to 6.49%.

Its standard fixed one-year rate will be cut 20bps to 5.99%.

BNZ now has the lowest six-month and equal-lowest one-year home loan rates among the big five banks.

Smaller bank TSB also offers a special one-year fixed rate of 5.99%.

BNZ’s two- and three-year fixed mortgage rates will both fall 10bps to 5.69%.

There will also be a 10bps trim for four- and five-year lending terms to 5.59%.

ANZ also announced changes to some of its short-term standard and special lending options.

The bank’s six-month fixed rate will drop 25bps to 6.50% (special) and 7.10% (standard).

Its one-year fixed rate falls 20bps to 5.99% (special) and 6.59% (standard).

Last week, banks were quick to roll out lower rates after the Reserve Bank (RBNZ) cut the Official Cash Rate (OCR) by 50bps to 4.75%.

Westpac cut all of its fixed standard and special home loan rates by 10bps.

Westpac’s standard fixed six-month and one-year rates sit at 7.35% and 6.79% respectively.

ASB also cut some short- and mid-term rates by up to 16bps.

ASB’s one-year fixed rate dropped 16bps to 6.19%.

Its six-month and two-year fixed rates both fell 10bps to 6.75% and 5.69% respectively.

The RBNZ’s OCR cut drew a favourable reaction from many of the country’s mortgage advisers and housing experts.

Squirrel founder John Bolton said he expected one-year fixed rates to drop below 6% relatively quickly.

“With more aggressive rate reductions in the pipeline, it feels increasingly likely that we’ll receive another 50bps cut at our final OCR announcement of the year on November 27,” Bolton said.

“The one-year swap rate is sitting at around 4%. But if things play out as expected, we could easily see one-year swap rates down close to 3% by the end of the year, which would translate into one-year fixed mortgage rates near 5.50%.”

Nathan Miglani, senior mortgage adviser at NZ Mortgages, said he was hopeful to see 4.99% shortly.