Another bank has reduced its mortgage serviceability test rate in the wake of Wednesday's Official Cash Rate (OCR) cut by the Reserve Bank.
SBS Bank says it's reducing its test rate to 6.75% from 7.00%, from next Monday, April 14. That's the lowest rate among the banks monitored by interest.co.nz.
Westpac NZ is lowering its mortgage serviceability rate to 7.00% from 7.25%, with ASB reducing its one to 7.10% from 7.30%, with both moves also effective Monday.
ANZ NZ, New Zealand's biggest home lender, reduced its test rate by 15 basis points to 7.10% on April 2, ahead of the OCR review.
Test rates are used as a guide to measure whether wannabe borrowers will be able to meet mortgage repayments if interest rates rise. A lower test rate can enable borrowers to borrow more money.
The Reserve Bank cut the OCR by 25 basis points to 3.50% on Wednesday.
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