Key Facts

  • ASB Bank has reduced its 18 month fixed home loan rate by 26 basis points, bringing it down to 6.89%.
  • The new rate is now lower than other main competitors for the stated term.
  • The change was made prior to the uncertain result from Wednesday’s RBNZ Monetary Policy Statement and Official Cash Rate review.
  • The bank did not match this home loan rate cut with any changes to its term deposit rates.

Article Summary

ASB Bank has strategically lowered its 18 month fixed home loan rate by 26 bps to 6.89%, rendering it the lowest among its main rivals for that term. This adjustment was made ahead of the RBNZ Monetary Policy Statement and Official Cash Rate review, causing it to stand out as slightly unusual.

The reduced rate could offer a unique opportunity for people seeking a financially sound decision in the current economic climate. According to Adam Boyd, ASB’s Executive General Manager Personal Banking, the 18-month rate might appeal to clients who are trying to balance security with flexibility.

While carded rates are one factor, what you will be offered after negotiation could differ as loan officers have a certain level of discretion to win new business or retain current customers. The bank did not implement a similar reduction to its term deposit rates despite the loan rate cut. From the looks of it, competitive pressures in the retail home loan market are likely the catalyst behind this decision.

Clients are advised to negotiate and shop around; most banks will discount their carded home loan rates for those with strong financial standing. Existing clients with a fixed term mortgage not due for renewal at this time may use the bank’s break fee calculator to assess their options.

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