It decision comes after the Reserve Bank had called for further mortgage rate cuts
Mortgage wars in New Zealand are not finished yet, with the Bank of China having launched one of the cheapest fixed home loans in the market.
A report by Good Returns revealed that the Bank of China launched its record-low, one-year mortgage rate at 2.55% – one of the lowest rates in the market. It also cut its 18-month and two-year fixed rates to 2.65%, matching those of HSBC Premier.
The bank's decision comes two weeks after the Reserve Bank of New Zealand (RBNZ) had called for further mortgage rate cuts.
RBNZ Governor Adrian Orr said the central bank's decision to keep the official cash rate (OCR) at 0.25% had reduced New Zealand banks' wholesale lending rates. Therefore, they could cut their rates further.
The Bank of China's one-year mortgage rate is 10 basis points cheaper than Kiwibank's 2.65%. Its 18-month rate is 14 basis points cheaper than BNZ's 2.79%, and its two-year rate is cheaper than the 2.69% rate of ASB, BNZ, TSB, and Westpac.
Simplicity's floating rate at 2.5% is the lowest in the market. However, it is only available to existing customers through a ballot system.
