Lender trims most fixed specials while Westpac warns rates could rise
Kiwibank has lowered most of its special fixed home loan rates. The cut brings its one-year special into line with the other major banks and adds to a run of rate moves across New Zealand’s mortgage market.
The bank’s one-year special fell 16 basis points to 4.99%, the same rate now offered by Westpac, ANZ, ASB, and BNZ, 1News reported. Its six-month special eased from 4.85% to 4.79%.
Kiwibank’s move follows changes by Westpac earlier in the week. Westpac cut most of its fixed rates, including reducing its one-year special to 4.99%, but raised its two-year rate to 5.39%.
Longer terms trimmed, two-year unchanged
The changes, effective from 12 November, also apply to longer terms. Kiwibank cut its three-, four- and five-year specials by four basis points each, to 5.55%, 5.75% and 5.85% respectively. The two-year special was left unchanged.
Standard rates for the same terms were also adjusted. These apply to borrowers with less than 20% equity, which is relevant for advisers with lower-deposit clients.
Rate cuts may not last
Even as lenders compete on short-term pricing, Westpac’s outlook suggests borrowers shouldn’t expect mortgage rates to keep falling.
“Our economists still think interest rates are heading upwards over the next year,” said Sarah Hearn, Westpac NZ’s managing director of product, sustainability and marketing. She added that the bank encourages anyone worried about making ends meet in the future to get in touch.
The Reserve Bank has sent a similar signal. At its October review, the Monetary Policy Committee voted 4–3 to hold the OCR at 2.75% but agreed that tighter policy was likely to be needed, ahead of its next decision on 9 December.
Kiwibank board changes
The rate cuts come a week after Kiwibank announced changes to its board. Independent director Kate Jorgensen retired from the board on 6 November.
Chair Susan Peterson said Jorgensen “has brought valuable experience and perspective to both our Board and Audit and Risk Committee”.
Independent director Kevin Malloy, who has been on the board since November 2016 and chairs its Remuneration, People and Culture Committee, has agreed to extend his term. His current term was due to expire on 28 November, and he will now stay on until 31 March 2027.
Peterson said his continued service “provides valuable continuity for the board”.
Stay informed with the latest housing market trends and mortgage insights — subscribe to our free daily newsletter.
