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 LandlordThe 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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It looks like the sleeping giant of New Zealand’s housing market could be stirring, with new REINZ data showing that both sales and prices in Auckland are up.
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.