PHOTO: With two major players already trimming rates, analysts say it’s only a matter of time before other banks follow suit. FILE
Banks are moving fast ahead of the Reserve Bank’s much-anticipated Official Cash Rate (OCR) decision this week — and homeowners are already reaping the rewards.
BNZ has announced a series of rate cuts across its fixed-term home loans, joining Kiwibank in what’s shaping up to be a pre-OCR rate drop trend.
BNZ’s new offers include:
-
6-month rate: down 10 basis points to 4.89%
-
18-month rate: down 26 basis points to 4.49%
-
2-year fixed: down 10 basis points to 4.65%
-
3-year fixed: down to 4.85%
Meanwhile, Kiwibank has moved early with its own reductions:
-
1-year fixed: down to 4.49%, matching the other major banks
-
2-year fixed: 4.69%
-
3-year fixed: 4.99%
Kiwibank’s economists say the economy now needs a more stimulatory OCR to reignite business confidence and household spending.
“An OCR around 2.5% is closer to what’s needed — and the risks lean toward 2%,” they said, adding that a drop to at least 2.5% by Christmas looks all but certain.
With two major players already trimming rates, analysts say it’s only a matter of time before other banks follow suit — setting up a potential mortgage rate showdown ahead of the Reserve Bank’s next move.