Weekly home loan report: Banks keep chopping down two-year fixed rates

Wednesday 25 February 2004

Banks are competing fiercely for home loan business by chopping their two-year fixed rates to levels well below other fixed rates.

By The Landlord

The Bank of New Zealand kicked the battle off just over a week ago when it dropped its two-year rate to 6.99% - along with a little trumpet blowing (“BNZ…sets a new market benchmark for two-year rates”).

Others lenders – mainly banks – followed suit with ANZ, ASB and National going to 6.95% (nothing like undercutting the market leader by 0.04%). Bank Direct went a little further to 6.90%, while HSBC and Sovereign (the biggest non-bank lender) dropped their equivalent rates to just 7.15%.

BNZ and HSBC also dropped other fixed rates and Westpac took its hybrid 30-month rate to 7.15%.

However BNZ counter-punched on Friday dropping its two-year rate another 20 basis points to 6.79%.

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