KEY POINTS:
Amid the economic gloom there's good news for homeowners as most major banks cut interest rates after the Reserve Bank's lowering of the official cash rate.
Reserve Bank Governor Allan Bollard yesterday cut the OCR to 6.5 per cent, blaming continuing problems in financial markets and a pessimistic outlook for global growth.
Kiwibank was the first to announce a drop, with a 1 per cent cut to its variable home loan rate to 8.7 per cent a year.
Spokesman Bruce Thompson said all of the bank's fixed-term rates had been reduced. Its two-year rate was now 7.79 per cent.
"There is a perception that there is more to come but at this stage we think we've taken a pretty aggressive position."
ASB also followed suit with cuts to its fixed home-loan rates effective today, although changes to its variable home-loan rates were under review.
The bank's biggest cut was to its six-month home-loan rate, which dropped from 9.25 per cent to 7.99.
TSB Bank managing director Kevin Rimmington said his bank's new two-year fixed mortgage rate of 7.78 per cent was "the lowest in the market". He said people making monthly payments on a $250,000 mortgage at the new rate would save about $500 a year or about $41 a month.
Westpac New Zealand also dropped its variable mortgage rate 100 basis points to 9.45 per cent.
ANZ National also announced changes across its various fixed-term rates, with the biggest move on its one-year mortgage rate, which fell from 8.99 per cent to 7.90 per cent. But this rate applies only to loans with less than 80 per cent loan-to-value ratio.
A spokesman for BNZ said its rates were under review.
