Home loan rates cut as market cools

Tuesday 19 October 2004

Some banks are slashing interest rates on fixed-term home loans with a couple now offering rates of about 7.3 per cent – undercutting rivals in a cooling property market.

By The Landlord

Bank of New Zealand cut its two-year fixed rate yesterday to 7.35 per cent, while smaller player TSB Bank moved even lower to 7.29 per cent.

BNZ is trying to build up its share of the home loan market, even though profits are being sliced thin to do it, banking experts say.

About two-thirds of all new loans are now on fixed-term mortgages, with the two-year term often the most popular.

All banks have lent about $1 billion each month on new home loans so far this year, with the total now about $94.5 billion.

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