Which banks are passing the OCR cut to their customers?
In response to the Reserve Bank’s (RBNZ) recent decision to lower the official cash rate (OCR) by 50 basis points, both ANZ Bank New Zealand and Pepper Money have announced reductions in their floating mortgage rates, impacting a broad base of borrowers and savers.
ANZ NZ’s major rate reductions
ANZ NZ has reduced its floating home loan interest rates and savings rates, passing on the full benefit of RBNZ’s rate cut to its customers.
As of late February and early March, ANZ NZ’s floating rate will decrease to 6.89%, and the flexible loan rate will adjust to 7%, marking the lowest these rates have been since October 2022.
“Interest rates have fallen significantly in a relatively short period – 175 basis points of official cash rate cuts since August last year,” said Grant Knuckey (pictured above), ANZ NZ’s managing director for personal banking.
Pepper Money cuts rates
Similarly, Pepper Money has announced a reduction in floating interest rates for existing home loans by 0.50% p.a., effective from March 7.
This adjustment is part of a broader effort to ease the financial burden on borrowers amid fluctuating economic conditions.
Pepper Money is also reaching out to its customers to confirm the new rates and any changes in monthly repayment amounts.
Rate adjustments across major banks
The rate reductions by ANZ and Pepper Money reflect a broader trend across the banking sector, where institutions are recalibrating their offerings to remain competitive and supportive of their customers’ financial needs.
Other lenders that adjusted their rate offerings include:
- TSB proactively reduced its one-year fixed home loan rate to 5.35% starting Tuesday. Additionally, the bank lowered its six-month rate to 5.89%, its 18-month rate to 5.49%, and its two-year rate to 5.29%.
- Westpac NZ made subtle adjustments, lowering its one-year special rate and 18-month rate each by 0.05% to 5.49% and 5.29%, respectively. More notable changes included a 0.1% reduction to its four-year rate and a 0.20% cut to its five-year rate, although its three-year term saw a rate increase of 0.40%.
- Kiwibank responded by reducing its home variable and offset variable loan rates by 0.50%, setting them at 6.75%. It also decreased its revolving loan rate from 7.30% to 6.80% and adjusted its savings rates downward to reflect the new economic environment.
- ASB made significant cuts, reducing its housing variable rate from 7.39% to 6.89% and its orbit variable rate from 7.49% to 6.99%. Additionally, ASB lowered its “back my build” rate from 4.94% to 4.44%.
- BNZ also joined in with a 50-basis point reduction in its variable rates.
Read the latest rate action from ANZ and Pepper Money NZ. For more information, also read the 1News article.
