Rate reductions rolled out across all terms as housing activity picks up
BNZ has announced across-the-board cuts to its fixed and variable home loan rates, moving ahead of the Reserve Bank’s anticipated official cash rate (OCR) decision.
BNZ general manager of home lending James Leydon (pictured) says the rate changes reflect the market’s expectation of a cut in the OCR.
Today’s “OCR cut is widely expected, which has given us the confidence to pass on these savings to customers ahead of the Reserve Bank’s announcement,” Leydon said.
The move also comes as BNZ navigates a tougher economic environment. The bank recently reported a 4.8% drop in underlying profit to $1.075 billion for the six months to March 31, citing economic pressures and strong sector competition. Despite this, statutory net profit rose 4.3% year-on-year to $795 million.
Market expectations for the May monetary policy statement have intensified, with major banks forecasting an OCR cut between 25 and 50 basis points. Kiwibank is urging a bold 50bp move to kickstart recovery, while ASB and Westpac expect a 25bp cut with cautious forward guidance.
RBNZ’s response could shape the mortgage rate outlook for the rest of 2025.
Customers offered greater flexibility with long-term options
Leydon noted that borrowers are increasingly exploring more stable, longer-term rates in light of evolving economic conditions.
“We know many of our customers are looking beyond the very short-term fixed rates as the interest rate environment evolves,” he said.
“By cutting our fixed rates across all terms, we’re giving customers more choice and the ability to lock in a competitive rate for a longer period.”
More affordable borrowing and rising housing market activity
BNZ expects that the reduced rates will ease financial pressure and further support growing housing demand.
“Lower interest rates should also help relieve some pressure on household budgets by making borrowing more affordable,” Leydon said.
“We are starting to see the impact of lower interest rates with increasing activity in the housing market. The number of customers applying for home loans with BNZ in the six months to April 2025 has increased 20% compared to the same time last year.”
Fast-tracked service and in-branch support for home buyers
Leydon said BNZ is prioritising quick service to meet growing demand and offer customers personalised assistance during key financial moments.
“Our home loan team is working hard to process the increasing number of applications within normal timeframes, with priority given to customers with the earliest settlement dates,” Leydon said.
“For customers that come to BNZ direct, our in-house home loan partners continue to offer fast, personalised service, providing decisions within 24 hours for eligible applications once all required information is received and lending checks are complete.”
Leydon said BNZ recognises that major financial moments, such as buying a home, often require personal support – which is why the bank has ensured all branches are now open five days a week to better meet customer needs.
