Kiwibank has reduced its one-year special fixed home loan rate by 26 basis points, aligning with other banks at 4.49%.
Last week, Westpac, ANZ, and BNZ adjusted their mortgage rates to align with the upcoming OCR cut to be announced this week. These banks also have their one-year special rates at 4.49%.
Kiwibank’s special rates require a minimum 20% equity and are also offered to first home loan buyers.
Kiwibank also reduced its special rates for six-month (4.85%), two-year (4.69%), and three-year (4.99%) terms. Standard rates were also cut for six-month (5.75%), one-year (5.39%), two-year (5.59%), and three-year (5.79%) terms.
Meanwhile, ASB has predicted aggressive measures from the Reserve Bank to “jumpstart” the economic recovery, expecting consecutive rate cuts that will reduce the Official Cash Rate (OCR) to 2.25% by Christmas.
A 50 basis point cut is expected on Wednesday, followed by another 25 basis point reduction on November 26.
“The exact timing of OCR moves and the extent of monetary stimulus deployed is conditional on the economic outlook and forthcoming data,” the bank said.
“The RBNZ will be mindful that there is a lot of stimulus yet to fully work its way through via mortgage refixing and strong agriculture incomes. Wholesale interest rates currently have 60bp of OCR cuts by year-end. So, some – but not all – of the benefits of a lower OCR are already factored into term lending rates.”
Other experts have also supported the 50 basis point cut, which would reduce the OCR to 2.5%.
“Last time I looked, the market was pricing in a 60% to 70% chance of a 50 basis point cut, so I would expect to see rates across the board respond to it to some degree,” Infometrics chief forecaster Gareth Kiernan said.