Mortgage wars: ASB, Westpac cut home loan rates

“Today’s fixed-rate decreases will appeal to a broad range of Kiwis, with our sub-5 mortgage rate offering a strong medium-term option for people looking for added certainty,” ASB executive general manager Adam Boyd said.

Westpac also trimmed its two-year special home loan rate by 30bps to 4.99% - matching steps its rival ANZ took last week.

Last week, ANZ took the lead in advertised home loan rates with a 4.99% two-year offer. And ANZ staff were offered an even lower rate, at 4.75%.

Today, Westpac also announced its special one-year rate would be cut by 20bps to 5.29%.

An interest rate analyst said New Zealand borrowers currently sitting on a more costly floating rate, waiting for a cheaper fixed rate to arrive, could miss out on savings.

JB Drax Honore strategist Sean Keane told Markets with Madison that mortgage borrowers, about half of whom have taken out floating rate mortgages, have only been benefiting from half of the OCR cut.

Last Wednesday, most retail bank moves involved floating and flexible home-loan rates.

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.

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