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Kiwibank slashes all fixed-term mortgage rates

Kiwibank is cutting all its fixed home loan rates by up to 0.51% after Reserve Bank left the official cash rate alone yesterday.

From today, all home loan rates at the state-owned bank are between 0.10% and 0.51% lower.

Reserve Bank Governor Alan Bollard yesterday opted to leave the official cash rate unchanged at 2.5% yesterday, stressing the local risks from offshore economic and financial turmoil.

Dr Bollard's terse statement gave no hint as to the likely timing or path of those possible increases if offshore problems turn out to have only a mild impact on the economy.

Kiwibank Chief Executive Paul Brock said the decision to cut rates reflected the expectation rates will stay low for the time being.

“We think that the right thing to do in this market is pass on the benefit of lower rates for all customers whenever we can,” said Mr Brock.

Kiwibank's mortgage rate changes are:

  • 6 months cut by 0.10% to 5.65%
  • 1 year cut by 0.15% to 5.65%
  • 2 year cut by 0.41% to 5.89%
  • 3 year cut by 0.31% to 6.39%
  • 4 year cut by 0.51% to 6.79%
  • 5 year cut by 0.41% to 7.19%.

More by Georgina Bond

Comments and questions

Interesting as National Bank have just increased my Flexi Mortgage by point 2%.Seems unilateral increases dont get the same publicity.Would be interested to hear how Kiwi Bank rates can go down when one of the biggest banks in the country gouges the other way.Seems the billions ANZ/NATIONAL BANKS earned of Kiwis is not enough.

ANZ need to recover its costs for sponsoring the RWC somehow don't they.

Flexi mortgage vs Nat floating was always an anomaly - well done on making the most of it while you could. Now pay the bank their money back.

The great thing about Kiwibank is that people can no longer complain about Bank profits going overseas.

If you are not happy with bank profits going overseas - change to Kiwibank!

I have thank you.

Good poin tHarvey Specter. Kiwibank has done well and deserves our support. It's profits go to the NZ govt who own it on our behalf.

Well said

Are you the ANZ/NATIONAL BANK in drag.

That 2 year rate of 5.89% looks very attractive and if the 3 year rate got to 6.00% it would be worth changing for many mortgage holders. The more consumers are prepared to change banks the more customer focused the banks will become.

Well done Kiwibank looking to attract new customers, just make sure you keep any eye on who you lend to so your bad loans don't leave you with egg on your face.

No point changing for the sake of small change..add the hidden costs of swapping and see how much you really aren't saving!!!

Costs nothing to change,plus if there was the weekly savings far outweigh the ANZ/NATIONAL BANK gouging.

Most people have mortgages in the $250k range and by doing some simple calculations on a 20 year term, managing to keep 0.5% below the alternative higher rate can save $16.50 a week, that is $8663 in your pocket.

As Maria points out, change costs are very low unless you have locked yourself into long term fixed rates.

Aussie, so changing is not worth it on a $s basis, that doesn't stop you going into your bank and demanding a better rate. Don't ask, don't get. My floating rate is 5.35% it took hard nosed negotiating, but why not, I worked hard for the money and damned if I'm going to give the bank any more than I have to.

You may find, depending on your loan size, it could be worth it. Some banks pay fees.

And the big picture stuff is that any profits made by Kiwibank stay circulating in NZ, instead of being sucked off to Aussie.

Kiwi bank dropping rates ahead of the pack - and the OCR - watch this space

No cost to change a bank. But wait until you want to change your lending structure. Even from floating. Or wait until you want to speak with a lending specialist - I went into KiwiBank and their response "oh well we dont have anyone here to do loans til like next week? is that OK can you come back?"... At least I have an assigned account manager. Honestly if you have the right account set up, you should be paying minimal or no fees, and if your lending is less than 80%, the bank will match that rate easily or less. And no I do not work for ANZ/National, but have moved from PSIS - ANZ - best move I have made. Been with them 6 months, yet to find a bank fee, my account manager is fantastic, and the rate is less that KiwiBank. I do not care if their profit goes to Australia. If you have a problem with it, become a shareholder and benefit from it - what benefit do you get from KiwiBank in that regard aside from brand loyalty?

I am not totally against KiwiBank, they have some clever marketing, but this is clearly a mortgage pricing war - theres more to a home loan than just your interest rate.