The lender has cut 30 basis points from its classic two year rate, taking it below the 4% marker. The major lender joins Sovereign, Westpac, ASB, and KiwiBank offering a two year term below 4%, as rates continue to edge down this year.
Investors will not be able to access the sub 4% rate from BNZ, however. It is only applicable to residential owner-occupiers. Investors will pay an additional 25 basis points, after a second rate card for investors was introduced in October. Advisers say BNZ has enforced higher rates for investors for several months.
The 3.99% offer is open to owner-occupiers with at least 20% equity in their home. According to marketing materials, the offer is open to customers with an account and one other product with the bank.
Competition is heating up once more after a short-lived price war in November and December. Last year, ANZ cut its fixed one year rate to 3.95%, prompting falls across the market to levels not seen since the 1940s.
BNZ's move leaves ANZ as the only major lender with a two year special rate above the 4% mark. As of Monday, ANZ's special two year rate is 4.29%.
The price war for New Zealand borrowers comes as wholesale interest rates trend down, as the market expects the OCR to remain on hold or even fall over the next 12 months.
New Zealand is poised for a prolonged period of low interest rates. The Reserve Bank makes its latest OCR decision on Wednesday. The central bank is widely expected to hold rates amid subdued economic growth, and downside risks to the domestic and global economy. The central bank expects the OCR to stay where it is until 2021.
What can we expect from Wednesday's announcement? The results of TMM's OCR Preview Survey can be found here.
