The next round of home loan rates have started this week, with most banks making, or predicted to make, significant changes.
As predicted by Good Returns we have our first sub 5% with BNZ offering today, a 6 month fixed rate of 4.99% for its Classic Combo Out of the Box offer.
The bank says the rate is part of a summer combo campaign running from February 21 to 6 March.
Like many of these specials there conditions, but the conditions are not just around equity levels, rather they include that new customers must take an additional two or more Out of the Box products to receive the rate.
Kiwbank, which also has a reputation of being aggressive on pricing, brought its floating rate down 50 basis points to what it call “an historic low.”
Chief Executive Sam Knowles described the present interest rate market as “extraordinary” with the bank’s variable rate falling from a high of 10.20% to 5.99% in five months.
The surprising move during the week came from Westpac, which is not traditionally known as being at the forefront of rate cuts.
It cut both its floating and six month rates taking 40 points off the floating to bring it to 6.49% and 20 points off its six month rate.
It looks like ASB and its related companies will also join in the changes over the weekend and its changes are likely to be across a broader range of maturities including one year, 18-month, four and and five year terms.
The longer term rates are likely to rise and shorter term ones fall.
Our view at Good Returns is that shorter term rates still have room to fall while longer term rates will remain reasonably static. Short term rates will come down as the Reserve Bank is expected to cut its official cash rate again and there is still room to move on margins.
