Banks cut floating rates below 7% (Update 5)

ANZ-National, SBS, Westpac and Kiwibank have cut their floating mortgage rates below 7% following the Reserve Bank of New Zealand's 150 basis point (bp) cut in the OCR. (Update 5 to include ANZ-National mortgage rate cuts.) New Zealand's newest bank, SBS, announced a market-leading floating rate of 6.45%, down from 7.2%. Its other rates remained unchanged. "SBS Bank is able to pass on significant rate reductions because we are not affected by the increased cost of borrowing offshore - a result of the global credit crunch. As a registered bank owned by our customers, we have and will continue to maintain that they are our primary focus," SBS chief executive Ross Smith said. Kiwibank cut its floating rate to 6.49%. Westpac cut its floating rate to 6.89% from 7.49% previously. Westpac also cut its 6-month rate by 80 bps to 6.19%; its 1-year rate by 101 bps to 5.79%; its 2-year rate by 96 bps to 5.89%; its 3-year rate by 100 bps to 5.99%; its 4-year rate by 50 bps to 6.4%; and its 5-year rate by 49 bps to 6.5%. Kiwibank was the first bank to react to the Reserve Bank of New Zealand cutting the Official Cash Rate to 3.5% by cutting its home loan rates. The most notable cut was a 30 basis point cut in its 1-year rate to 5.69%, a new market leader.

The New Zealand-owned bank also cut its variable rate by 50 basis points to 6.49%; its 6-month rate by 50 basis points to 5.99%; its 2-year rate by 100 basis points to 5.99%; its 3-year rate by 50 basis points to 6.49%; its 4-year rate by 30 basis points to 6.69%; and its 5-year rate by 10 basis points to 6.89%. Kiwibank said these changes were effective immediately. National bank cut all of its mortgage rates by between 15 and 105 bps. It cut its 6-month rate 100 bps to 5.99; its 1-year rate 100 bps to 5.99%; its 2-year rate 105 bps to 5.95%; its 3-year rate 75 bps to 6.35%; and its 4 and 5-year rates 15 bps to 6.95. National bank also cut its floating rate below 7%, by 55 bps to 6.95%. It's new rates will be effective January 31. ANZ cut its variable rate and 1, 4 and 5-year rates the same as National Bank, but made different cuts to other rates. It cut its 6-month rate 74 bps to 6.25%; its 18-month rate by 100 bps to 5.99%; its 2-year rate 75 bps to 6.25%; and its 3-year rate 60 bps to 6.5%. A full list of mortgage rates offered in New Zealand can be found here. Marac Finance was the first financial institution to cut term deposit rates after the OCR announcement, cutting a number of its rates by 100 to 150 bps. Notable cuts were its 1-year term deposit rate by 150 bps to 5%; its 2-year rate by 100 bps to 6%; its 3-year rate by 50 bps to 7%; and its 4 and 5-year rates by 35 bps to 7%. The new Marac rates will be effective February 2. Full lists of term deposit rates offered in New Zealand can be found here and here.