BNZ and SBS cut home loan rates, first shots fired in 2016 mortgage wars
Bank of New Zealand and SBS have cut home loan rates, kicking off the first flurry of activity for the new year.
Minnow lender SBS attempted to lure Kiwis back from holiday with a "special" three year fixed term of 4.65 per cent, the lowest on the market.
However, it was quickly overtaken by BNZ, which launched its own 4.49 per cent special on Monday morning.
The bank dropped its two year rate to 4.39 per cent, also leading the market in that category.
Like most home loan specials, the deals come with strings attached, requiring at least 20 per cent equity in the property, and salary paid into a transaction account.
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The best fixed mortgage rates in all categories out to five years are now under 5 per cent.
SBS had briefly offered a rate under 4 per cent, which the lowest advertised rate in several decades, but ended the offer earlier this month.
Fellow locally-owned lender The Co-operative Bank is currently leading the market across five categories.
Chief executive Bruce McLachlan recently said his personal view was that the current rates were definitely the bottom of the cycle.
"I would expect that over time we will see them edge up."
Floating mortgage rates have also fallen after the Reserve Bank cut official interest rates in December.
While the official rate of 2.5 per cent is now at its lowest since being introduced in 1999, some economists expect further cuts to come this year.
The Reserve Bank's next review of the benchmark rate will be announced on January 28.
HOTTEST BANK MORTGAGE RATES
Floating: 5.6 per cent - ICBC
One year: 4.49 per cent - The Co-operative Bank
One year "special": 4.25 per cent - HSBC
Two year: 4.49 per cent - The Co-operative Bank
Two year "special": 4.39 per cent- BNZ
Three year: 4.75 per cent - The Co-operative Bank
Three year "special": 4.49 per cent- BNZ
Four year: 4.89 per cent - The Co-operative Bank
Four year "special": 5.15 per cent - ASB
Five year: 4.99 per cent - The Co-operative Bank, HSBC Premier
Five year "special": 5.25 per cent - ASB
Source: Good Returns