Major banks quick to pass on Reserve Bank's 25-basis point cut to official interest rates

Banks have been quick to react to the latest cut to the Official Cash Rate by the Reserve Bank, with some immediate falls in floating mortgage rates announced.

ANZ today announced it will lower the interest rates on its Floating and Flexible home loans by 0.25% p.a. – to 6.24% for ANZ Floating Rate Home Loans, and 6.35% for Flexible Home Loans. The new rates will take effect for new ANZ Floating Rate Home Loan customers from Monday 27 July and for all existing Floating Rate and all Flexible Home Loan customers from Monday 10 August.

Kiwibank has made an immediate cut to variable and revolving mortgage interest rates following today’s announcement by the Reserve Bank. The rate cuts match the full reduction of 0.25% bringing the floating rates down from 6.40% to 6.15%. The reduction is immediate for new customers and will take effect in two weeks for existing customers.

SBS Bank said it had dropped “a number of” its following the OCR cut, including dropping its residential floating rate to 6.14% p.a – effective 9am Monday morning. The bank was due to release more details later.

These announcements all followed the RBNZ trimming the OCR to 3% from 3.25% and with RBNZ Governor Graeme Wheeler observing that “some further easing seems likely”. Economists believe the RBNZ is likely to unwind all of last year’s rate hikes by the end of the year, which would take the OCR back to historic lows of 2.5%.

How much more scope there will be for banks to cut mortgage rates further will remain to be seen.

The new floating and fixed mortgage rates compares as follows this morning:

below 80% LVR Floating  1 yr  18mth  2 yrs   3 yrs   5 yrs 
    % % % % %
6.24 4.89 5.55 4.99 5.59 5.79
ASB 6.50 4.89 5.25 5.10 5.39 5.65
6.34 5.19   4.99 5.29 5.75
Kiwibank 6.15 4.89   4.99 5.39 5.60
Westpac 6.40 5.39 5.39 4.89 5.49 5.79
             
6.20 4.89 4.99 4.99 5.20 5.59
HSBC 6.60 4.89   4.89 5.29 5.60

6.14 4.99 4.85 4.99 4.99 5.59
6.49 5.45 5.59 4.99 5.40 5.85

We will update this table during the day.

<!–

//–>