ASB and ANZ lead, Westpac follows with rate cuts
Westpac New Zealand has reduced its two-year special home loan rate to 4.99%.
This move, effective today, marks a key moment as the rate falls below 5% for the first time since April 2022, highlighting Westpac’s response to market conditions and its aim to attract more homeowners with appealing rates.
“We’re committed to helping homeowners reach their goals sooner, by delivering great rates and backing them up with personalised guidance and advice from our nationwide team of home loan experts,” said Helen Ryder (pictured above), Westpac NZ’s managing director of consumer banking and wealth.
Westpac NZ’s strategic rate adjustments
The new rate of 4.99% represents a 0.3% reduction from the previous rate.
Following similar moves by its competitors, Westpac announced its rate cuts shortly after ASB, which had already lowered its one-year mortgage rate by 24 basis points to 5.25%, its two-year rate by 30 basis points to 4.99%, and its three-year rate to 5.35%, 1News reported.
Westpac’s reduction to a 4.99% rate aligned with ANZ’s earlier adjustment, which led the sector by dropping its two-year fixed home loan rate to 4.99% coinciding with last week’s OCR cut.
Westpac also adjusts term deposit rates
Alongside the home loan rate cuts, Westpac is adjusting its term deposit rates, with changes ranging from 0.1% to 0.3% across 90-day to three-year terms.
Despite these reductions, Westpac’s eight-month term deposit rate holds strong at 4.4%, maintaining its position as one of the highest among major banks.
Market impact and consumer benefits
Westpac’s rate cuts come in the wake of a broader industry trend triggered by last week’s 50 basis point cut to the OCR, which dropped to 3.75%. The banking sector anticipates further OCR reductions throughout the year, suggesting a continued competitive environment.
Westpac’s proactive rate adjustments not only aim to benefit current homeowners by reducing their mortgage costs but also attract new customers seeking favourable borrowing conditions.
Industry insights reflect broader trends
The competitive dynamics noted by industry experts indicated that as banks like Westpac continue to adjust rates, consumers could see historically low borrowing costs, making it an opportune time for potential buyers and current homeowners considering refinancing.
BNZ reduced its floating rates by 50 basis points, bringing its standard variable rate down to 6.94%. Westpac applied a smaller cut of 40 basis points to its floating home loan rates, lowering its Choices floating rate to 6.99%, while also making modest reductions to its fixed-term rates. Meanwhile, Kiwibank decreased its variable home loan rate from 7.25% to 6.75%, RNZ reported.
