Major NZ banks cut mortgage rates in wake of OCR cash rate cut

OCR cash rate cut

BIG news in the New Zealand mortgage market as FOUR major banks immediately respond to the reduction in the Reserve Bank's official cash rate cut by announcing cuts to their home loan and savings rates within hours of the change – meaning there has NEVER been a better time to compare mortgage rates in New Zealand. 

The Reserve Bank of New Zealand today (August 7th 2019) SLASHED the official cash rate by 50 basis points to 1 per cent today - a new record low for New Zealand's cash rate.

The big banks took very little time to respond to this change and ASB was the first bank to announce it was making a cut on its home loan and saving rates.  It did not take long for Westpac, BNZ and Kiwibank to follow suit.

Some of the first mortgage rates to drop were on ASB's variable home loan products where the interest rate will fall from 5.7 per cent to 5.2 per cent.  In addition, the ASB revolving credit Orbit home loan will drop from 5.75 to 5.3 per cent.

The changes are going to take place quickly with August 14th being the date of rate change for new customers and August 21st for existing customers.

ASB has even made moves on its fixed rate mortgages. It will slice four basis points of its two year fixed term rate dropping it to 3.75 per cent making it the lowest two year fixed rate available at a major bank, although there are still products out there which can better this rate.

Money Compare is STRONGLY urging borrowers to make the most of the low interest rate environment. Our Mortgage Health Check is a free service to review your current home loan arrangements. 

 

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Gavin Male, Money Compare CEO said, "With the drop in the OCR to record low rates there has literally never been a better time to review your home loan. There are lots of options that can be considered, even considering changing from monthly to fortnightly payments would save you money and that is without taking into account the actual lower interest costs.”

Male continues, “Many Kiwis get annoyed when the banks announce these cuts as they are on fixed terms, but there is no reason to be annoyed by that.  New Zealand law requires banks to allow a mortgage fixed rate contract to be broken and on top of that it limits them to only recovering costs, and not 'profiting' from the transaction.  What that means in plain English is that if you are in a fixed term mortgage you can still get out and with rates at a record low you may well still come out with a significant upside, reducing your payments or term and keeping more money in your pocket not the banks.”

Here at Money Compare we are happy to help those that may not have the financial knowledge to maximize the benefit of these rate cuts.  Our Mortgage Health Check is a no obligation and free service whereby we can review your current mortgage arrangement and identify if there are savings for you to take advantage of.  

Click here to leave your details and a member of our Mortgage team will be in touch to give you a quick review on your situation and see if you can take advantage of the latest cut in rates. 

 

Click on the link below and complete our short form.

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Wednesday, August 7, 2019