Home loan price war breaks out

Sunday 17 October 2004

BNZ started things a week ago when it widely advertised a promise that it will have “the lowest advertised two-year fixed home loan rate of the big four banks.”

By The Landlord

Technically the claim was true as the fine print named the competition. However at the time ASB-owned Bank Direct was matching BNZ with a 7.40% two-year rate.

Then on Friday morning ASB moved to match BNZ at 7.40%. BNZ has responded dropping its rates another 5 basis points to 7.35% (although this is still unannounced).

New Zealand’s biggest non-bank lender, Sovereign, which is also owned by the ASB has jumped in on the game and dropped its two and five year rates.

Its standard two-year fixed rate is 7.65%, but its rate for home loans of more than $200,000 is 7.40%.

These rates are significantly below the bulk of the mainstream banks that are sitting on 7.75%. National Bank is the piggy-in-the-middle with a two-year rate of 7.60%. Overall two-year rates range from a low of 7.40% to a high of 8.55%.

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