The decision comes after weeks of record-low rates and intense competition
As the Reserve Bank of New Zealand (RBNZ) calls for further mortgage rate cuts, New Zealand banks continue to outdo each other – and TSB is the latest to put up a fight with other banks by relaunching its home loan price-match offer.
Under the deal, TSB will match any nationally advertised mortgage rate from an Australian-owned bank. Therefore, it will match ASB's latest 2.69% two-year rate.
Justine St John, the general manager for marketing and customer experience at TSB, said they are “doing what's best for New Zealanders contending with the many impacts of COVID-19 on their daily lives.”
“This rate match promise gives Kiwis more financial options and takes the stress away because they can come to TSB and know they're getting the best interest rates. Not only that, but it takes price out of the equation and gives New Zealanders another reason to bank local and keep profits here,” St John said, as reported by Good Returns.
Read more: Reserve Bank calls for further mortgage rate cuts
RBNZ Governor Adrian Orr believes that banks still have “more room to go” to drop mortgage rates further following the central bank's decision to keep the official cash rate (OCR) at 0.25%.
The central bank is also considering extending loan payment deferrals beyond the current six-month period, but the decision “will depend on what government policy is at the time.”
“We would facilitate as best we can what that policy situation is,” Orr said. “There is a limit before banks would be able to regard those as non-performing. We would have to work through that at some stage and work out what the approach is.”
