BNZ and Kiwibank lead with rate reductions
Several New Zealand banks are reducing fixed mortgage rates ahead of the Reserve Bank’s official cash rate (OCR) announcement this week. On Tuesday, BNZ lowered key fixed-term offerings, including a 10 basis point drop in its six-month rate to 4.89%, an 18-month cut to 4.49%, and a reduction in its two-year rate to 4.65%. The three-year rate also fell to 4.85%.
Kiwibank aligns with major lenders
Kiwibank made similar moves earlier, lowering its one-year fixed mortgage rate to 4.49%. The two-year rate dropped to 4.69% and the three-year rate to 4.99%. These changes bring Kiwibank in line with competing lenders in anticipation of a potential cut to the OCR.
Expectations for a lower cash rate
Kiwibank economists have emphasized the need for a more stimulatory OCR to boost business investment and consumer spending. They predict the OCR could fall to around 2.5% by the end of the year, with downside risks possibly pushing it as low as 2%.
