July Mortgage rates: A question for our readers
Posted July 25, 2008on:
Does anyone know why ASB cut mortgage rates following the OCR decision? Bank credit funding costs have been going through the roof – which is why the RBNZ felt that it needed to cut the OCR just to prevent large increases in mortgage rates!
I’ve heard that Kiwibank can cut rates because of the large amount of domestic funding it has under its thumb. I was wondering if there is there something specific to ASB that has allowed them to cut rates? If anyone has any idea I would love to hear from them in the comments.
Update: Westpac as well – still only the two year rate though, so it could still be viewed as “cheap” advertising.
Update 2: According to Good Returns this was the interest rate action:
Following the Reserve Bank cutting the official cash rate by 25 basis points last Thursday, ASB, TSB, Bank Direct, Sovereign and Westpac all reduced their two-year rates.
ANZ and National Bank broke ranks with their competitors and announced they would cut one year fixed rates as well as two year rates. Their two year rates came down 25 basis points to 8.95% and their one-year rates are down 20 points to 9.20%.