Banks' home-loan war raises inflation fears

Sunday 24 October 2004

Big banks are slashing some interest rates in a war to win customers, just as the Reserve Bank warns again that some homeowners might struggle if interest rates rise.

By The Landlord

Yesterday, ANZ Bank dropped its two-year fixed-term rate for home loans half a per cent to 7.35 per cent, to be "competitive".

That rate matched the BNZ, which has promised to undercut any other big bank on the two-year rate till at least mid-December. BNZ is expected to respond.

"We have thrown down the gauntlet on the two-year (rates)," said BNZ business development general manager Andrew Whitechurch. Other banks had followed.

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