Rate action follows similar moves by Westpac, ANZ, BNZ, and ASB
Following the Reserve Bank’s decision to lower the OCR by 50 basis points to 3.75%, Kiwibank has reduced its mortgage rates, aligning with a broader trend among major banks to recalibrate their rates in response to changes in monetary policy.
Kiwibank’s aggressive rate reductions
Effective immediately, Kiwibank has reduced several of its mortgage rates.
The two-year fixed special rate has decreased from 5.29% to 5.19%, and the one-year fixed special rate has dropped from 5.55% to 5.19%. Moreover, the six-month special rate has been cut from 5.99% to 5.79%, Stuff reported.
For those opting for flexible rates, Kiwibank’s revolving and variable special rates have been reduced from 7.30% and 7.25% to 6.80% and 6.75%, respectively. These special rates are available to borrowers who have at least 20% equity or deposit.
Additionally, standard rates have seen reductions, including a decrease in the two-year fixed rate from 6.19% to 6.09% and the one-year fixed rate from 6.45% to 6.09%.
Competitive landscape
In the wake of the OCR announcement, other major banks like Westpac, ASB, BNZ, and ANZ also implemented rate cuts, while TSB made its move earlier in the week.
Despite this, Kiwibank has positioned itself competitively by offering some of the lowest rates, particularly for short-term loans.
The Co-operative Bank, however, maintains the lowest floating rate at 6.45%, a 30-basis-points advantage over Kiwibank, interest.co.nz reported.
This rate competitiveness shows how major banks are no longer relying solely on discretionary discounts but are instead leading with low carded rates to attract and retain customers.
