Kiwibank cuts variable home loan interest rate
13/08/2009Kiwibank has cut its variable home loan rate from 5.99 per cent to 5.79 per cent, believed to be the lowest variable rate offered in New Zealand for at least 40 years.
The bank last cut its variable rate in February this year. The new rate is effective immediately for new customers and in two weeks for existing customers.
The bank has, however, raised its two to five-year fixed term interest rates following increases in longer-term wholesale market rates.
Acting Chief Executive of Kiwibank Paul Brock said recent comments by the Reserve Bank Governor that the Official Cash Rate is likely to stay at its current level or lower for some time gave it confidence to again cut rates.
“The wholesale markets and deposit rates being offered by banks clearly indicate that in the longer term, rates will rise. But for now we see the opportunity to pass through additional savings on variable rates for our customers.
“This gives those home owners with fixed term rates coming due for renewal the opportunity to grab our very competitive variable and short term rates while they consider their options.”
Kiwibank has a six-month rate of 5.45 per cent and one-year rate of 5.59 per cent.
Mr Brock said interest rates had been static for all the banks for the last six months, but in the last week there had been sharp increases for longer term lending.
“We think that financial commentators will agree that a variable rate of 5.79 per cent is startlingly good value. “
Kiwibank’s two-year rate is 6.39% (up 0.30%); three years 7.40% (up 0.55%); four years 7.95% (up 0.55%) and five years 8.30% (up 0.35%).
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