A new round of fixed mortgage rate cuts may be on the way.
Kiwibank has announced a wide range of reductions and it is the second of the main mortgage banks, after ASB, to start offering a sub 5% rate in the current rate cycle.
Wholesale interest rate swap markets shifted noticeably lower across the whole curve as the impact of the first-quarter GDP disappointment sunk in. This was spruiked by some bank economists trying to out-do each other with calls for more and faster OCR cuts. No doubt their wholesale desk traders got the message.
These lower wholesale rates open the door for more reductions in fixed mortgage rate offers.
It is not clear whether the Kiwibank move was decided before or after today's wholesale moves.
But in any event, Kiwibank's new carded six month fixed offer is the lowest in the market for this term at 5.39%.
The bank's one year rate has become a 'special' at 5.09%. This is a drop of -30 basis points.
Kiwibank's two year rate will become 4.99% (the same as ASB's one year 'special') and this is a drop of -40 bps. Only HSBC's Premier two year offer trumps it.
There is no change to their three year 'special' of 5.39%, but they have reduced their three year standard rate to 5.69% from 6.29%, a fall of -60 bps.
Kiwibank's four year standard rate has been cut to 5.75% from 5.95%. There is no 'special' offer for this term.
And for five years, the 'special' of 5.60% remains unchanged although Kiwibank's standard rate falls from 6.49% to 5.99%.
Keep an eye out on Friday to see if any of Kiwibank's rivals announce changes of their own.
These rates will compare as follows on Monday morning if there are no other changes announced in the meantime:
| below 80% LVR | Floating | 1 yr | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
 |
6.49% | 5.39% | 5.39% | 5.59% | 5.75% | 5.79% |
 |
6.50% | 4.99% | 5.10% | 5.39% | 5.75% | 5.65% |
 |
6.34% | 5.35% | 5.39% | 5.49% | 5.65% | 5.75% |
 |
6.40% | 5.09% | 4.99% | 5.39% | 5.75% | 5.60% |
 |
6.40% | 5.49% | 4.99% | 5.59% | 5.75% | 5.79% |
 |
6.45% | 5.15% | 5.25% | 5.35% | 5.55% | 5.69% |
 |
6.60% | 4.95% | 4.95% | 5.40% | 5.50% | 5.60% |
| SBS Bank | 6.65% | 5.59% | 5.35% | 5.35% | 5.35% | |
 |
6.49% | 5.55% | 5.29% | 5.40% | 5.85% | 5.85% |
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