Banks start cutting mortgage rates following OCR drop

Wednesday, 9 October 2024

The Reserve Bank has cut the Official Cash Rate by 50 basis points, dropping it to 4.75%. The move has triggered immediate interest rate reductions across major banks, giving homeowners a break ahead of the holiday season. Zane Small reports.

Banks have already begun cutting interest rates following the official cash rate cut to 4.75%.

The Reserve Bank announced it was cutting the OCR 50 basis points on Wednesday afternoon.

Almost immediately BNZ made changes to its variable home loan rates, passing on the full OCR cut of 0.50%, dropping from 8.44% per annum to 7.94%.

Finance Minister Nicola Willis talks to media after OCR cut

The rate is effective from Thursday.

BNZ general manager home lending products James Leydon said the bank was continually assessing its interest rates and looking for opportunities to pass on rate reductions to its customers.

“BNZ will continue to move quickly in response to changes in external factors, including the Official Cash Rate and wholesale interest rates, to ensure we’re passing rate changes on to our customers as quickly possible.”

BNZ cut rates upon the announcement of the OCR drop.

ASB's variable home loan rate would also fall by 50 basis points from 8.39% to 7.89%, while the Orbit rate drops from 8.49% to 7.99%.

ASB’s Business and Rural floating base rate would move from 6.69% to 6.19%.

Westpac followed suit within an hour, reducing floating rates for home loan customers by 0.5%. The change took interest rates on its Choices floating and offset loans to 7.89%, while the Choices everyday loan has a 7.99% rate.

Westpac also cut fixed home lending rates by 0.1% and reduced rates for business and agribusiness lending.