Property & Mortgages

BNZ offers lowest ever advertised mortgage rate

mortgage rate

Bank of New Zealand (BNZ) will waive contactless debit transaction fees for small businesses in response to the impacts of coronavirus

The Bank of New Zealand (BNZ) is cutting fixed mortgage rates to its lowest ever advertised rate and will waive contactless debit transaction fees for small businesses over the next three months in response to the impacts of coronavirus.

On Friday BNZ announced changes in home loans, term deposits, and contactless transaction fees to provide more certainty for its customers at a time when widespread economic disruption is expected due to Covid-19.

BNZ’s one year “classic” fixed interest home loan rate has been cut by 40 basis points to 3.09 per cent, its 18 months rate has been cut by 34 basis points to 3.05 per cent and its two year rate has been cut by 20 basis points to 3.35 per cent.

It follows competitor ANZ on Wednesday becoming the first bank to cut its fixed home loan rates after the Reserve Bank cut the official cash rate from 1 per cent to 0.25 per cent on Monday.

BNZ chief customer officer Paul Carter said the 3.05 home loan rate offered to customers was its lowest advertised rate ever.

Being able to lock it in for 18 months means more certainty on this low rate for longer, which we know customers want at this time, Carter said.

ANZ said was cutting its one-year fixed rate special by 40 basis points to 3.05 per cent and its two-year fixed rate special would cut by 30 basis points to 3.35 per cent.

BNZ’s changes follow a 75 basis points cut to floating rates it announced on Monday, and cuts to the three, four, and five-year rates last week. The new rates are effective from Monday.

BNZ is also lifting its 18-month special term deposit rate on Monday by 25 basis points to 2.65 per cent.

As the cash rate and home loan rates fall, one thing that’s not often mentioned is the impact on savers facing lower incomes from falling deposit rates.

We know this particularly affects retirees and people on fixed incomes, so we’ve acted decisively to help support them, Carter said.

On Wednesday ASB’s variable home loan rate reduced by 0.75 basis points from 5.20 per cent to 4.45 per cent. Its “orbit” home loan rate reduced from 5.30 per cent to 4.55 per cent.

Meanwhile Kiwibank lowered its one year fixed rate from 3.45 per cent to 3.09 per cent and its variable rate from 5.15 per cent to 4.40 per cent.

BNZ would also be waiving all contactless debit transaction fees for small and medium businesses for the next three months.

This was in addition to its existing business package, which included reduced overdraft rates, up to 100 per cent asset finance funding at reduced rates, extensions of trade credit, principal repayment holidays, and options for interest only.

In uncertain times, we want to offer our customers as much certainty as possible, Carter said.

Westpac is waiving contactless debit fees for eligible existing customers for six months.

ANZ is waiving contactless debit transactions fees for small businesses until June 30.

Risk Warning:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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