CBS Canterbury cuts variable and short fixed mortgage rates; PSIS cuts floating to 5.75% (Update 1)

CBS Canterbury and PSIS have cut their floating mortgage rates by a full 50 basis points, challenging the big four Australian owned banks and Kiwibank to follow suit in the wake of the Reserve Bank's 50 basis cut in the Official Cash Rate five days ago. CBS Canterbury cut its floating rate to 6.45%, which brings it into line with the major banks, but PSIS went further than the major banks by cutting its regular floating rate to 5.75%, giving it the lowest variable rate on the market under Kiwibank on 5.99%. Disquiet is growing among homeowners about the apparent reluctance of the major banks to pass on the lower OCR in the form of lower floating mortgage rates. The banks have argued their funding costs on international borrowings and local term deposits have remained high despite the OCR cut to 2.5%. CBS Canterbury, a building society based in Christchurch, also cut its 6 month and 12 month mortgage rates, but by slightly less than the full 50 basis points. However, it actually raised its 12 month and 18 month term deposit rates as competition remains intense among the banks for New Zealand savings.

CBS Canterbury cut its six month mortgage rate by 26 bps to 5.99% and its one-year rate by 46 bps to 5.79%. In a move that will steepen its rate curve, CBS increased its five year mortgage rate by 10 bps to 7.60%. CBS also announced it was increasing its 12 and 18 month term deposit rates by 25 basis points to 4.50%. Alongside this, it said it was cutting its 2 year term deposit rate by 50 bps to 4.50% and its 3 year term deposit rate by 75 bps to 4.50%. The new CBS rates are effective from today, it said. PSIS announced it would cut its standard variable mortgage rate by 50 basis points to 5.75%, currently the lowest floating rate offered in New Zealand. New PSIS rates are effective from tomorrow. Other mortgage rate changes by PSIS included a cut in its 6 month rate by 40 bps to 5.40%, a cut in its one year rate 25 bps to 5.50% and a cut in its 2 year rate by 25 basis points to 5.95%. PSIS also cut its 'special' variable rate by 50 basis points to 5.25%. Only long term customers with more than 20% equity in their houses can get this rate. Click here to go to our mortgage rates page. CBS announced it had cut its variable mortgage rate by 50 basis points to 6.45%. It also cut its six month rate by 26 bps to 5.99% and its one-year rate by 46 bps to 5.79%. In a move that will steepen its rate curve, CBS increased its five year mortgage rate by 10 bps to 7.60%. CBS also announced it was increasing its 12 and 18 month term deposit rates (for NZ$5,000 and above) by 25 basis points to 4.50%. Alongside this, it said it was decreasing its 2 year term deposit rate by 50 bps to 4.50% and its 3 year term deposit rate by 75 bps to 4.50%. New CBS rates are effective from today, it said. PSIS announced it would cut its standard variable mortgage rate by 50 basis points to 5.75%, currently the lowest floating rate offered in New Zealand. New PSIS rates are effective from tomorrow. Other mortgage rate changes by PSIS include: Click here to go to our mortgage rates page.