Key Facts
- ASB, a major bank in New Zealand, has reduced some of its mortgage rates for the seventh time this year.
- The reductions apply to its six-month, one-year, and four-year rates, slashing them by up to 10 basis points.
- ASB’s six-month term is now at 7.24%, the one-year term at 7.14%, and the four-year rates dropped to 6.49%.
- The bank has made these changes in line with the recent dip in wholesale rates.
- ASB also decreased its six-month and nine-month term deposit rates by 10 basis points each.
- The Reserve Bank has held the Official Cash Rate at 5.5% to manage inflation, despite high interest rates.
- The Consumer Price Index (CPI) showed a 4% rise in the annual rate of inflation over 12 months to the March quarter.
Article Summary
In a move that brings some relief to mortgage holders, ASB, one of New Zealand’s principal banks, has announced a reduction in some of its mortgage rates. This marks the seventh time the bank has cut rates this year. Among the changes are a drop in the six-month term rate from 7.29% to 7.24%, a cut in the one-year term to 7.14%, and a reduction in the four-year mortgage rates to 6.49%.
ASB executive general manager of personal banking, Adam Boyd, stated the reductions have been made in accordance with the recent dip in wholesale rates. The lower rates are likely to be of significant interest to existing home lending customers seeking to refix, as well as to potential first home buyers.
Alongside mortgage rate reductions, ASB has also cut back its six-month and nine-month term deposit rates by 10 basis points each. These changes come amidst high interest rates, driven by the Reserve Bank’s decision to hold the Official Cash Rate steady at 5.5%. The bank is using this strategy to battle inflation, which has continued to rise above its 1-3% target, reaching a 4% increase in the Consumer Price Index over 12 months to the March quarter.
