BNZ Reduces Fixed Home Loan Rates Amid Doubts Over RBNZ OCR Review Outcome

Date Published: 22 February 2024

Key Facts

• BNZ has lowered its fixed home loan rates; variations range from -4 bps to -20 bps.
• Economists at ANZ suggest an increase in the Official Cash Rate (OCR) during the RBNZ review next week, whereas BNZ economists anticipate no change.
• Despite no matching reduction in BNZ term deposit rates, the change in home loan rates puts BNZ among the mainstream banks with the lowest rate cards.
• The rate cut comes amidst a competitive real estate selling season characterized by abundant availability and sluggish sales.
• Homebuyers are urged to negotiate and shop around as most banks can offer discounted carded home loan rates for clients with strong financials.
• There’s no change in term deposit rates at BNZ, despite the rate cut in home loans.

Article Summary

Bank of New Zealand (BNZ) has announced a series of reductions in its fixed home loans. This contrasts with rival bank ANZ’s economists’ anticipations of an increase in the Official Cash Rate (OCR) in the following week’s Reserve Bank of New Zealand (RBNZ) review. However, BNZ economists expect no change in the OCR this time.

The cut in home loan rates by BNZ, which varies from -4 basis points (bps) for the two-year fixed rate to -20 bps for the four and five-year fixed rates, positions them as one of the mainstream banks with competitive low rate cards. Despite these changes, there is no corresponding decrease in BNZ’s term deposit rates.

This rate change happens during a critical real estate selling period marked by a significant supply of properties but slow sales. This situation might have influenced the decision as mortgage managers strive to meet their lending targets amidst stiff competition. Therefore, customers with strong financials are encouraged to negotiate as banks can offer discounted rates to attract and retain business.

Prospective homebuyers can use BNZ’s mortgage calculator to comprehend the altered home loan rates. Furthermore, existing customers with a fixed-term mortgage that is not due for renewal can utilize the bank’s break fee calculator to explore their options.

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