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Get the latest news and tips about mortgage finance and the property market. Scott Miller, mortgage broker from Advanced Mortgage Solutions comments on housing and lending.

Floating home loan rates tumble

Published by Scott Miller on Thursday, March 10, 2011 in

As Advanced Mortgage Solutions had largely expected and discussed in March’s AMS Property Gazette, today we saw the Reserve Bank announce a reduction in the Official Cash Rate today from 3% to 2.5%.

ANZ, ASB, BNZ, National Bank, Kiwibank and Westpac moved quickly this morning cutting their floating rates by 50 basis points after the Reserve Bank announced it had reduced the OCR.

These changes follow reductions in fixed mortgage interest rates last week, making the major bank medians for floating, six-month and one-year rates all below 6%.

Floating rates are as follows:

ANZ – 5.74%

ASB – 5.75%

BNZ – 5.99%   (Total Money 5.59%)

National Bank – 5.74%

Kiwibank – 5.65%

SBS – 5.65%

Westpac – 5.75%   (Choices Everyday rate 5.60%)

ASB chief executive Catherine McGrath says the terrible tragedy in Christchurch will have far reaching consequences, not only for its customers in that region, but for the whole community and the wider economy.

"While the OCR is just one factor that we consider when setting our interest rates, we hope that by dropping our variable lending rates now we can assist the Reserve Bank to alleviate the new financial pressures now confronting so many New Zealanders."

Westpac economist Dominick Stephens says Westpac concurs wholeheartedly with the Reserve Bank's assessment, and takes the Reserve Bank at its word that the OCR will rise rapidly in 2012.

 "At the margin, we'd favour an even steeper yield curve than the market has so far delivered."

Kiwibank's floating rate has been cut to 5.65%, which is immediate for new customers and effective in two weeks for existing customers.

The ANZ and National Bank FlexiPlus rate has also been reduced to 5.65%, to come into effect from March 28, for ANZ new and existing customers and from March 29 for National Bank new and existing customers.

For the most part these changes will take effect immediately for new clients but may take up to a month for existing clients.

Please feel free to contact me if you have any questions or would like to make comment.

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