Bank sets new low in competitive market
In an increasingly rigid financial landscape, BNZ has slashed its two-year fixed mortgage rates to unprecedented lows.
Rate reductions take center stage
BNZ recently announced a significant cut in its fixed mortgage rates, with a newly adjusted rate of 5.29% for a two-year term – a rate that is currently the lowest available, surpassing even Heartland Bank’s offering, interest.co.nz reported.
Previously, BNZ matched a six-month rate of 5.99%, a figure now commonly adopted by several major banks.
This strategic reduction marks BNZ’s return to its lowest two-year rate since June 2022.
BNZ’s competitive edge maintained
While BNZ’s other rate adjustments align it closely with competitors, its aggressive new two-year rate distinguishes the bank.
However, BNZ has yet to align its term deposit rates with this latest reduction, maintaining a 5% term deposit rate, shared only with Kiwibank. This balance raises questions about the sustainability of such attractive offers, given the new mortgage rate cuts.
Impact on savers and borrowers:
Traditionally, lower home loan rates are offset by reductions in savings rates. With BNZ’s latest move, changes in term deposit rates are anticipated though not yet confirmed.
For borrowers, the era of substantial bank flexibility, including cashbacks and below-card discounts, is narrowing. These benefits are increasingly scarce as banks adapt to a stable wholesale rate environment, which curtails more drastic funding strategies.
This rate action from BNZ follows that of ANZ and ASB.
Read the news on interest.co.nz.
