ASB Cuts Mortgage Rates for the Second Time in a Week, Matches Major Banks

Date Published: 4 March 2024

Key Facts

• ASB has dropped their one-year home loan rate by -10 basis points to 7.29%, and its two-year lending rate has been trimmed -4 bps to 6.85%.
• They’ve also increased their 6-month term deposit rate by 5 basis points to 6.05%.
• This follows their 18-month mortgage cut last Tuesday which dropped -26 bps to 6.89%.
• ASB now shares the same one year rate with BNZ and Westpac, and has the lowest 18 month rate of any major bank.
• ASB’s two-year home loan rate matches BNZ as the lowest of the major banks.
• The rates revision came after the RBNZ Monetary Policy Statement, providing clarity on the policy background to interest rate markets.
• ASB’s 5 bps raise to the six month term deposit rate is at par with a key competitor, BNZ.

Article Summary

ASB has made multiple changes to its mortgage rates this week, including a reduction of their one-year home loan rate to 7.29% and a cut of their two-year lending rate to 6.85%. In conjunction with these reductions, ASB has also increased its 6-month term deposit rate to 6.05%.

These changes follow ASB’s 18-month mortgage cut of 26 basis points to 6.89% last Tuesday. With these modifications, ASB’s one year rate is now in line with those of BNZ and Westpac, making it joint leader among the major banks. ASB also boasts the lowest 18-month rate and two-year rate, which is now tied with BNZ.

Despite criticism stating that these mortgage rate revisions are merely matching the competitive market rates, it’s worth noting that ASB’s changes were announced after the RBNZ Monetary Policy Statement. This offered new clarity on the policy environment for interest rate markets. The slightly increased 6-month term deposit rate now matches that of BNZ.

It’s recommended for borrowers to negotiate and shop around because most banks will discount their advertised home loan rates for applicants with strong financials. Tools like mortgage calculators and break fee calculators can help assess the impact of these new rates.

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