Lender cuts mortgage rate for some

Last updated 12:14 06/07/2012

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Kiwibank has again dropped a home loan rate below 5 per cent, in the hopes of regaining momentum from a successful similar deal earlier in the year.

The bank's ''special'' six month fixed deal, released this morning, offers home owners with 30 per cent equity in the property a 4.99 per cent interest rate.

Those terms are the same as a one-year promotion the bank launched in May, which sparked a flurry of fixed rate cuts among the major banks.

The state-owned bank's most recent disclosure statement does not indicate how many customers would be able to meet the criteria, but showed 82 per cent of its customers had at least 20 per cent equity in their homes.

Kiwibank spokesman Bruce Thompson said the cut was not the result of reduced funding costs. Instead, the bank was aiming to build on the success of its first promotion, which was ''extremely successful''.

''The wholesale rates aren't actually conducive to cut fixed rates, however the six month one we believe still gives us an opportunity,'' he said.

''So we're back out in the market with that, and we hope to pick up on some of the momentum we had for the one year promotion.''

The 4.99 per cent rate is 26 basis points lower than the bank's carded rate and 66 basis points lower than its floating rate.

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- BusinessDay.co.nz

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