ASB responds to falling wholesale costs
ASB has joined the ranks of major banks adjusting their mortgage rates in response to the declining short-term wholesale interest rates, marking a significant move in the lending landscape as 2025 begins.
ASB’s competitive rate Adjustments
Following similar actions by other major banks, ASB announced a reduction in its mortgage rates across several terms.
ASB has reduced its six-month, one-year, and 18-month mortgage rates by 20 basis points each, setting the one-year rate at a market-leading 5.59%, RNZ reported.
This decision follows Westpac’s recent rate cut to 5.99% for its six-month plan and aligns with adjustments made by BNZ at the end of the previous year after the Reserve Bank’s substantial 50-basis-point cut in the OCR in November.
Emma-Jayne Liddy (pictured above), ASB’s general manager of product, commented on the rate changes.
“We want to help customers looking to refix, or Kiwi looking to buy, get off to a strong start in 2025,” Liddy told RNZ. The “rate changes reflect the recent fall in short-term wholesale rates.”
Liddy also noted the significant impact these changes could have on borrowers.
“With more than two-thirds of our mortgage customers opting for a term of 18-months or less, we expect these changes to be popular,” Liddy said.
Future economic predictions
The financial markets are anticipating further reductions in the OCR, with predictions suggesting a decrease of an additional 50 basis points next month from its current rate of 4.25%, RNZ reported.
Such forecasts indicate a potential continuation of the trend towards lower borrowing costs, which could further stimulate the housing market as the year progresses.
Read the RNZ report here.
