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Fixed rates cut by 16 lenders

Thursday, March 3rd 2011, 3:52PM

The ripple effect of the Christchurch earthquake has been huge, with interest rates also feeling its effect this week as 16 lenders dropped fixed rates in the last three days. ANZ lead the charge and its changes can be seen in this graph.

This has been in response to the sudden drop in swap rates following the earthquake last week as market expectations around the Official Cash Rate (OCR) changed to predict a cut by the Reserve Bank. Even the Prime Minister John Key has said he expects to see interest rates cut next week.

Most of the lenders in response have dropped the one-year rate by 50 basis points among other changes and as a result the median for the major banks has fallen from 6.45% to 5.95%. The floating rate median is now higher at 6.20%.

We look at economist expectations for next week's Monetary Policy Statement and also analyse the December quarter mortgage book's of Kiwibank, ANZ, SBS and Westpac.

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