Kiwibank has switched the focus of what it calls its "headline home loan marketing" to its offset product, cutting the interest rate on this to 5.25% from 5.50%.
The bank says its offset mortgage lets customers to use their savings, and the savings of other family members, to be "offset" against the home loan, reducing the amount of interest they have to pay.
Kiwibank's previous promotional focus has been on limited time special offers on fixed-term mortgage rates.
“The offset product enables customers to significantly reduce the amount of the loan incurring interest charges," Kiwibank CEO Paul Brock said. "We calculate savings over the term of a loan of $30,000 to $40,000 and much shorter repayment periods."
“It also allows parents and other family members to assist the home owner by letting their savings and transaction balances be used to reduce the amount incurring interest charges," Brock added.
The offset mortgage rate cut is effective from Saturday (July 27) for new customers, and from Saturday August 10 for existing customers.
See all advertised bank home loan rates here.
5 Comments
Finally the floating rate has gone down, about a couple of years of greedy profits too late but at last they are have broken the cartels 'fixed' as in rigged floating rates.
Hope everyone with a chance climbs into this and we see some real competition between the banks - go Kiwibank!!!!
Nice to see some balls and honesty come together
President of Property...
Here be a Can of Worms ..... Call me a cynic , but Kiwibank is the first to break the either implied or tacit price fixing agreement between the banks to not drop the floating rate.
This move by Kiwibank is nothing more than a drop in the floaing rate " in disguise" , and will likely incur the ire of the big Aussies
My view is that its another example of price fixing by poweful organisations in which ordinary Kiwis get shafted .
The use of infomation assymetry by these entities , and non disclosure means we are like mushrooms ,always kept in the dark and fed on bullsh...
It happens with everything from interest rate pricing to electricity pricing , to the Petrol price , the retail milk price, and retail Lamb and Chicken prices .
We are bloody clueless as to how these prices are formulated and left wondering why we often end up paying so much more than everyone else in the world.
If we are starting to get falling floating rates but rising longer term fixed rates then...
that means the yield curve is starting to get steeper.
Which means the money markets are starting to price in a lot more economic growth over the next 2-3 years.
This is a good sign for the New Zealand economy.
You score full marks for this observation , GDP Growth is likely to go much higher due to Chch rebuild and development of Auckland , maybe some mining, and some oil and gas development .
I recently went to an economic update by Nathan Penny who sees good times ahead
Tongue in cheek .... its all happy days again , and we will all be rich on the back of a booming economy...... unless of course , something goes wrong
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