Mortgage price war heats up with TSB

Donna Cooper

The New Zealand lender has taken aim at its Aussie-owned big four rivals with the offer, which came into effect yesterday, and runs until March 3 2019. The offer is open to owner-occupiers and property investors, and arrives at a time of fierce competition in the lending market. Wholesale lending rates have dropped amid a growing expectation we may see an OCR cut this year. The lowest one year rate on offer from the big four is Westpac's 3.99% one year special. 

Donna Cooper, chief executive of TSB, said the offer was the first of its kind in the New Zealand market. "We know this is a bold and unique move in the New Zealand banking industry. But we believe it is an important move that will help support the good of wider New Zealand."

TSB took aim Australian-owned lenders reaping profits in New Zealand and sending them overseas. “More than $5 billion in combined profit was sent overseas by Australian-owned banks last year, that’s equal to almost 2% of New Zealand’s entire GDP.

“At TSB we don’t think that’s quite right. If that money stays in New Zealand, it can continue to move through our local economy and boost regional growth," Cooper said.

The nationalist approach from TSB comes as Australian lenders are braced for a major fallout from the Royal Commission into financial services. The country's major banks have been censured for endemic misconduct over the past year.

Justine St John, TSB General Manager, added: "With an increasing spotlight on overseas ownerships of banks, we are proactively encouraging New Zealanders to consider their banking options."