Rates go up and down

Thursday 28 October 2004

The Reserve Bank is poised to tighten the interest rate screws for the sixth time this year - just as the major banks embark on a rate-cutting war for fixed-term mortgages.

By The Landlord

The bank Governor, Dr Alan Bollard, is expected to raise the official cash rate on Thursday to 6.5 per cent in an effort to contain inflation.

But as the bank tries to cool what it considers an overheated economy, the big banks, led by the BNZ, are vigorously cutting fixed-term rates, especially for two-year mortgages.

The BNZ's price-cutting campaign last week was followed by rate cuts at the ANZ, ASB, TSB, HSBC, Superbank and Kiwibank.

The biggest movers were the ANZ, which dropped its two-year fixed-rate home loan from 7.75 per cent to 7.35 per cent, and the ASB, which cut the same fixed rate from 7.4 per cent to 7.2 per cent.

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