ASB has dropped some of its fixed term mortgage rates, as well as some term deposit rates for savers.
It has lowered its six-month home loan rate 10 basis points to 5.79%, its four-year rate 20 basis points to 5.59% and five-year rates 10 basis points to 5.69%.
The bank said it is the fifth time it had lowered fixed mortgage rates this year.
“We’re seeing a growing number of customers splitting their mortgages across different terms to hedge their bets in the current climate, and we’re pleased to be able to offer a range of lending options to suit homeowners’ and homebuyers’ diverse needs,” said ASB’s executive general manager personal banking Adam Boyd.
Some of its term deposit rates have been lowered between five and 20 basis points.
There was a flurry of interest rates drops last month, in the wake of the Reserve Bank lowering the official cash rate 50 basis points to 3.75%.
The next OCR review is on April 9.
‘We could start to see a shift’
Meanwhile, CoreLogic NZ chief property economist Kelvin Davidson said recent “rate wars” among banks meant borrower behaviour would be something to watch closely.
In January, only 10% of new borrowers opted for fixed terms longer than 12 months – the other 90% chose floating or fixed for six or 12 months.
“Around 71% of NZ’s existing mortgages by value are currently fixed but due to reprice onto a new mortgage rate soon, and another 12% is floating,” he said.
“Over the past two-to-three years, these repricing events have generally meant a higher mortgage rate for borrowers.
“However, that situation has now turned around again, and with rate wars recently emerging among lenders offering lower two to three year fixed rates, we could start to see a shift back towards them pretty shortly.
“Both for new borrowers and those repricing existing loans. In other words, the fixation with short-fixes might be about to come to an end.”
