BNZ, Westpac follow ANZ with rate cut move

Wednesday, 6 July 2022

Bank of New Zealand has the highest customer satisfaction scores. It also has a stringent internal surveillance of its bankers.

BNZ has cut its classic two-year mortgage rate from 5.69% to 5.39%.

Its standard rate will drop from 6.29% to 5.99%.

The change came after ANZ moved to cut its two-year special rate on Tuesday.

The cost of wholesale funding for the banks has dropped in recent weeks, which commentators said had given lenders the opportunity to reduce the retail rates they offer customers.

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Westpac has also cut its two-year rate, reducing its two-year special by 24 basis points to 5.45%.

Interest rates have risen sharply since last year.

In May last year, borrowers taking out a standard one-year rate were paying an average 3.2%. In May this year, that had increased to 5.04%.

The Reserve Bank is expected to continue to increase the official cash rate. It expects the rate to peak near 4% although some economists say it may be able to reduce the current rate of inflation to an acceptable level without raising the rate that high.

Banks are also competing for business with things such as cashback offers. BNZ said this week it was offering up to $20,000 in cash back or 1% of a borrower’s loan.