ASB has cut both its advertised six-month and 18-month fixed-term mortgage interest rates, effective tomorrow Friday, May 25.
The bank says it's cutting its six-month rate by 50 basis points to 5.25% and its 18-month rate by 40 basis points to 5.40%.
The cuts follow ASB dropping its one to five-year advertised fixed-term rates last week, amid a flurry of cuts to fixed-term rates from all the banks over the past couple of weeks as their own cost of borrowing falls and they compete for customers in a low growth market.
However, no bank has yet cut its floating, or variable, mortgage rate. ASB's is 5.75%.
ASB's new six-month rate is bettered only by SBS Bank's 4.99% rate, although this is conditional.
Its new 18-month rate is, however, 30 basis points higher than BNZ's market leading 5.10%.
9 Comments
Told ASB last week that I wanted their best deal on floating as a colleague was offered 0.75% off floating or fixed rates for 2 years to changeover + $1,000 for legals and $1,000 'Housewarming' from ANZ. Best ASB could offer was 0.5% off (I have 60% equity) so needless to say I have signed up and as of next wek ASB will no longer me making money out of me. Shame they spend so much money promoting their brand on TV to try and lure new customers instead of working on retaining existing stable customers - have been with ASB since I was 12 years old and am now in my 40's.
Problem here is every client is not the same as the other. While one might have got 0.75% off it might be that client had a bigger loan, had a lot of business with the bank (like all their accounts, credit cards, insurances etc) so they got a bigger discount than the next door client who only had their mortgage there and had spread their other business around town.
Its times like this you can use your loyality to the bank to get a bigger discount and they will (if they have any sense) reward that client back.
I suspect after all this each bank would have got a few customers off one bank and lost a few to the next and it would would have cost them all a few bucks in commissions to Mortgage Brokers, give aways and alot of other upfront costs to end up at the same position.
PS Have a look at all the 7 day bank branches now opening. Not sure how many of them are on $150k per year.
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