BNZ announced it will reduce its one-year fixed home loan rate to 4.49%.
Karna Luke, the bank’s executive for customer products and services, said the bank is fiercely competing for new home loan customers by providing appealing rates.
“We’re seeing strong customer demand for our 1-year fixed term as borrowers look for the right balance between securing a competitive rate and maintaining flexibility in an evolving rate environment,” he said.
“At 4.49%, this is a nearly 40% drop from the February 2024 peak of 7.35% for the one-year fixed term – providing real relief for households.”
Luke said new customers can take advantage of the rate right away, as can existing customers who are approaching a refix or currently have variable rates.
Analysts have indicated that interest rates might decline slightly more due to the recent weakness in GDP data.
Mortgage adviser Jeremy Andrews of Key Mortgages believes there is still potential for rates to decrease further.
“Repayments at peak market rates over a 30-year loan term are now similar to what you’d pay over 20 years at today’s special one- and two-year rates,” Andrews said.
“We’re encouraging most mortgage holders to take advantage of this and accelerate their repayment terms. Most homeowners choose to keep their repayments at similar levels when rates drop.”