Kiwibank has announced a one year mortgage rate special of 5.65%, which is below its previous one year rate of 5.80% and is the lowest one year fixed mortgage rate on the market.
The rate, which Kiwibank called a 'Hot August Home Loan Special' is open until the end of August.
See all bank mortgage rates here.
Kiwibank Chief Executive Paul Brock said the present international financial turmoil had given the bank a brief “window of opportunity” to launch a fixed rate special.
“The one year rate of 5.65 per cent matches our present floating rate, so it is a great opportunity for people to lock in a low rate while they wait and see what happens in the markets,” Brock said.
As recently as last week economists and markets were expecting the Reserve Bank to hike the Official Cash Rate by 50 basis points to 3% on September 15.
Markets have now discounted that possibility, although most economists have yet to revise their forecasts.
Early last week one year wholesale 'swap' interest rates, which are used by banks as the base for retail fixed mortgage rates, rose as high as 3.38%.
But market turmoil and fears of a global economic downturn have seen those rates fall sharply back to mid-July levels around 2.98%.
ASB last week hiked its fixed mortgage rates after this early August spike in rates, but yesterday reversed those cuts and in some cases took rates lower than before. See Gareth Vaughan's article here.
See interactive chart below.
No chart with that title exists.
14 Comments
I have to agree with wolly
Its a "Hot Aug special"...its below the 6month term..same as their floating, and given the uncertsiny of markets, and easy sell.....THEN in 12 months time where will be?..the current mess settled down and a good chance floating may not be an opition and longer term already gone up....they have possibly missed the bus...And its for new loan/customer.
Difinately are marketing stragagy, not an indicator of things to come, overall non news.
If interst rates go up, stay the same or go down, makes no difference to the bank, other than a few new customers....
Totally agree steven.
Wolly and his mates now expects contracts can be broken when it suits them. So Banks can then change interest rates on term deposits when rates change. Ya right!!!!!
Fixed is fixed. Its borrowers choice. Certainity with fixed or flexibility with floating but carry interest rate risk.
Sounds like Wolly would seen it totally reasonable to go back to a service station 3 days after filling up and asking for a refund as they had just dropped their prices at pump.
You make a decision on the day (fix or float) and take the associated risks with it.
Get real!!!!!!!!!!!!!!!!!!!
Marketing probably, I think I saw a comment on a price war looming in which case ppl cant move.......in some ways its not a bad deal.....gives you sureity for a year....given the craziness, Im pondering it. Kiwibank variable is 5.65%, fixed 1 year on their web site says 5.8%....they need to fix....
Anyway I cant see a OCR hike now this year and probably not next.....if its follows the "fundimentals" that I think are overwelming its going to drop, the only Q is will there be a temp spike / stall before the real nose dive.....
regards
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