More mortgage rates tumble after Official Cash Rate cut

All major banks have cut interest rates this week after the Reserve Bank's OCR decision.

Kiwibank has cut its short-term mortgage rates in response to Wednesday’s Official Cash Rate cut.

The bank today announced its six-month fixed special rate will drop 20 basis points (bps) from 5.99% to 5.79%. Its standard rate will fall by the same margin to 6.69%.

The biggest cuts were for its one-year fixed rates which dropped 36bps to 5.19% (special) and 6.09% (standard).

The bank is also trimming its two-year special and standard fixed rates by 10bps, bringing them both in line with the one-year rates.

“In the falling rate environment, our borrowers have favoured shorter terms like six months and one year when fixing their loans, so we are offering market leading rates in the terms where our customers want it,” said Nicole Pervan, Kiwibank’s general manager, home lending.

Kiwibank was also cutting all of its term deposit rates, the largest being a 60bps cut to its one-year term for savings of between $5000 and $9999.

Mortgage wars

Major banks moved quickly this week to trim mortgage rates after the Reserve Bank cut the Official Cash Rate by 50bps to 3.75% on Wednesday.

Yesterday, ANZ dropped its special two-year fixed rate to 4.99%, undercutting its rivals in the process.

Most other major banks are offering two-year fixed rates around 5.29%.

ANZ lowered its special one-year fixed rate to 5.29%.

On Wednesday, the majority of bank moves involved floating and flexible home loan rates.

ASB’s variable home loan rate will drop to 6.89%, while its back my build rate will fall to 4.44%.

BNZ cut its floating rates by 50bps, with its standard variable rate dropping to 6.94%.

Westpac only passed on 40bps to its floating home loan rates, cutting its Choices floating rate to 6.99%. But the bank did shave a bit off its fixed-term rates.

The biggest of these cuts was its three-year rate dropping by 40bps to 5.39% (special) and 5.99% (standard).

Kiwibank also cut its variable home loan rate from 7.25% to 6.75%.