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Kiwibank First To React To Rates Cut

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Oct 23 NZPA - Kiwibank was the first bank to react to Reserve Bank governor Alan Bollard's cut in the Official Cash Rate (OCR) by making a matching one percent cut to its variable home loan rate.

And an ASB Bank spokeswoman said its variable rate was under review while its fixed term rates had been reduced.

Dr Bollard cut the OCR today from 7.5 percent to 6.5 percent.

Kiwibank chief executive Sam Knowles said the new variable rate would be 8.70 percent per annum with immediate effect for new customers and in two weeks for existing customers.

"We are also making cuts across the board to our fixed term rates," Mr Knowles said.

Kiwibank cut the premium two-year to below 8 percent late last month in anticipation of today's OCR reduction and has now passed on an additional small cut for this rate to 7.79 percent.

The one-year rate has also been cut to 7.99 percent.

Mr Knowles said the quick cuts were all part of the bank's strategy to be "slow to rise, but fast to fall" with home loan rates.

The ASB spokeswoman said the bank's six-month rate was now 7.99 percent; for 12 months, 18 months and two years, it was 8.1 percent; for three years 8.3 percent; four years 8.5 percent and 8.75 percent for five years.

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