Banks Compete to Offer Better Mortgage Rates After OCR Cut – Two-Year Rates Drop Below 5%
Good news for homeowners and first-time buyers! Major banks are stepping up to offer better mortgage rates following last week’s official cash rate (OCR) cut. Westpac is the latest to jump on board, joining ASB and ANZ by lowering its two-year special home loan rate to 4.99%.
ANZ was quick off the mark, reducing its two-year fixed rate on the same day as the OCR drop, and ASB followed suit earlier today.
ASB Offers Relief to Borrowers
ASB’s executive general manager, Adam Boyd, said the bank is serious about easing the burden on borrowers.
“We want to help our home loan customers and first-home buyers, which is why we’ve consistently dropped rates throughout January and February,” Boyd explained. “Our new sub-5% mortgage rate provides a strong option for those wanting more certainty in the medium term.”
Along with home loans, ASB also reduced some term deposit rates by 5 to 25 basis points.
Westpac Joins the Race
Later in the afternoon, Westpac matched its competitors, bringing its two-year special rate below 5% for the first time since April 2022. Several of its other fixed-term rates also saw cuts ranging between 10 and 30 basis points.
“We’re here to help homeowners reach their goals sooner,” said Helen Ryder, Westpac NZ’s managing director of consumer banking and wealth. “Great rates are important, but we also back that up with personalised advice from our home loan experts across the country.”
Westpac also adjusted term deposit rates, lowering them by 10 to 30 basis points for terms between 90 days and three years.
More Rate Drops Expected
Economists predict that more banks will follow this trend, offering even lower mortgage rates throughout the year. Last week’s 50-basis-point OCR reduction brought the rate down to 3.75%, and further cuts are anticipated.
While falling home loan rates are a welcome relief for borrowers, those with savings accounts may be keeping a close eye on how deposit rates are affected.
