Kiwibank has announced a significant reduction of 0.50% in its variable home loan rates. Following this change, the rates for both the variable term loan and the offset-variable term loan will be set at 7.75%, while the revolving term loan will be adjusted to 7.80%.
The bank’s decision was presented ahead of the Reserve Bank’s announcement to lower down the Official Cash Rate (OCR) to 4.75%.
“While controlling inflation is essential, prolonged high interest rates have heavily burdened businesses and households. Lowering rates quickly is crucial to provide much-needed relief for borrowers, so it is important that Kiwibank and the market respond,” Kiwibank Chief Customer Officer for Business Banking Elliot Smith said.
“Our decision to cut variable loan rates by 0.50% highlights how New Zealand’s largest locally owned bank continues to rise to the challenge.”
New Zealand’s four major banks—ANZ, ASB, BNZ, Westpac, and Kiwibank—anticipated a 50 basis point cut to strengthen the economy. “In keeping with our aspiration to continue to disrupt the banking sector in Aotearoa,” Kiwibank said, “Kiwibank is responding early to that call. By taking the initiative, we’ve laid the challenge to the ‘Big’4’—it’s going to be interesting to see if and when they respond.”
Kiwibank anticipates that this interest rate reduction will lead to total savings of $18 million per year for over 35,000 customers in business banking and home loans.