Kiwibank cuts rates to spark quiet property market

Kiwibank has cut its 2 year fixed mortgage rate by 10 basis points to 6.59 per cent, taking it at least 6 basis points below its major competitors in an attempt to spice up demand in a quiet spring housing market.

ASB's two year rate is 6.7 per cent, ANZ/National is on 6.69 per cent, BNZ is on 6.65 per cent and Westpac is 6.69 per cent

The move sparked an almost immediate response from TSB, which cut its 2 year rate by 10 basis points to 6.58 per cent.

Last month Kiwibank's new CEO Paul Brock said that now was the time for first home buyers to take the plunge.

Brock, who recently replaced Sam Knowles as Kiwibank's CEO, said then he would be concerned if people were being put off home ownership. He noted the overall housing market had slowed down "quite a lot" and, although he didn't have the data at his fingertips, there was a feeling that first home buyers might be stepping out of the market.

"That's a bit of a concern really for New Zealand. From my point of view home ownership is really good," said Brock.

"It's one of those things that's both good for the individual to get started towards financial security, I think it's good for the country and it's also good for the community that people are owning their own homes."

"In a way it's almost that rite of passage for New Zealanders, the opportunity to get started and in many cases it is the first step towards financial security," Brock added.

"Making that step is really, really important. So I would be concerned if people are being put off by views on property prices, or views on interest rates."

INTEREST.CO.NZ