12 lenders cut fixed rates

Friday 19 March 2010

Economists have been expecting a rise in fixed mortgage rates, however lenders have thrown in a curve ball this week with 12lenders making cuts.

By Jenha White

Kiwibank put pressure on the major banks today by dropping its one year rate by 10 basis points to 6.15% which is the lowest rate for banks alongside National Bank. HSBC may have an even lower rate of 5.99% but it also has eligibility criteria  that you must have at all times a minimum value of $500,000 in loans with HSBC or a minimum value of $100,000 in savings and investments.

TSB Bank started the week off by making its two year-rate the lowest for all lenders after a six basis point (bp) cut to 7.09%. TSB also dropped its four-year rate by 30 bps to 8.20% and its five-year rate fell 15 bps to 8.50% with both now in line with the median for banks.

ASB, BankDirect and Sovereign also made welcome reductions to its longer term fixed rates.  All three lenders dropped their 18-month terms by 35 basis points, two-year rates were cut 45 points and three-year rates went down by 25.  NZ Home Loans made the same adjustments to its two and three-year rates.

ASB and BankDirect's three-year rates are now the lowest at 7.70% alongside PSIS which also cut its three year rate as well as its four year rate to 8.20% which is the lowest rate for non-bank lenders.

SBS Bank has made cuts to all its fixed term rates of one-year or more bringing them into line with the medians for minor banks.  Its biggest reduction was made to its five-year rate of 25 bps followed by a 15 bps cut to its three-year rate, 10 bps off its two-year rate and its one-year dropped by 4 bps to 6.25%.

Hawkes Bay-based lender HBS reduced its floating rate by a hefty 59 bps from 6.49% to 5.90% making it a more competitive rate alongside all lenders.

It also cut its three year rate by 19 bps from 7.99% to 7.80% and its four and five-year rates were reduced by 25 bps to 8.25% and 8.50% respectively. Its five year rate is now the lowest for non-bank lenders.

Credit Union Baywide took a 45 bp slice out of its two-year rate this morning to 7.25% and cut its three-year rate by 25 points to 7.85%.

AMP changed its three, four and five year rates to 7.75%, 8.20% and 8.50% and Credit Union North has cut its three-year rate by 35 points to 7.75%.

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