This follows a similar move from ANZ
Bank of New Zealand (BNZ) and Westpac have joined ANZ in cutting some home loan rates.
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Earlier this week, ANZ cut the rate on its two-year fixed home loan special from 5.8% to 5.45%.
Following the ANZ rate change, BNZ has cut its classic two-year mortgage rate from 5.69% to 5.39% and its standard rate from 6.29% to 5.99%; while Westpac has lowered its two-year special by 24 basis points to 5.45%, Stuff reported.
With the cost of wholesale funding for banks declining in recent weeks, this had provided lenders with the opportunity to slash the retail rates they offer customers, commentators said.
Interest rates have risen sharply since last year. From the average 3.2% borrowers were paying for a standard one-year rate in May last year, it has increased to 5.04%. this year.
The Reserve Bank is tipped to further increase the official cash rate, potentially peaking near 4%. Some economists said, however, that the central bank may be able to reduce the current rate of inflation to an acceptable level without raising the rate that high, Stuff reported.
