ANZ led off in the middle of last week by trimming its home loan 1 year fixed interest rate to 5.25% from 5.65% as a response to Kiwibanks offer of 4.99% 1 year fixed for those with a minimum of 30% equity in their property.
Sovereign has late this afternoon reduced 1,2 and 3 year fixed interest rates. Their 3 year fixed interest rate falls from 6.10% to 5.75%.
The Bank finance market has been very very competitive in recent times with heavy discounting off the advertised interest rates regularly being offered. These fixed interest rate cuts look more like a “promotional” activity and effectively just get closer into line with what lenders have been offering of late anyway. Even with todays fixed interest rate cuts one is quite likely to get better than the above rates if prepared to ask the question. A word then to those considering interest rate options…Ask for a better rate!!.
I would expect the other lenders to follow Sovereign in the very near future. Swap rates have been declining on the back of an uptick in European jitters and the recent poor employment number here has assisted the declines.