Westpac home loan rates: Two-year rate to drop as other rates rise
Westpac is cutting its two-year home loan interest rates, with the bank’s pending 5.29% advertised special rate set to be the lowest of the five big banks’ popular two-year rates.
The 0.16% drop kicks in from Monday next week, Westpac said.
The four other main banks in New Zealand have two-year fixed mortgage rates of 5.39% (Kiwibank), 5.45% (ASB and BNZ) and 5.49% (ANZ), according to interest.co.nz
However, while the two-year rate is dropping, Westpac’s other home loan rates will rise by between 0.10% and 0.26% from Monday. The bank’s one-year rate is currently 4.99%, and its three-year rate 5.39%.
Savers would benefit from increases to most longer-term deposit rates by between 0.10% and 0.25% a year, Westpac said.
The planned changes come as rising geopolitical tensions cause wholesale rates to surge, Westpac NZ’s product, sustainability and marketing managing director, Sarah Hearn, said.
Banks use wholesale rates to fund longer-term lending.
“Even with today’s rate changes, we’re absorbing a lot of our recent cost increases rather than passing them on to home owners.
“With the OCR [Official Cash Rate] forecast to rise over the next year, now is a good time to think about your home loan strategy and what options may be best for you.”
The two-year rate could be a good option for home owners wanting more certainty on repayments, and “potential protection” against rate rise, Hearn said.
“A third of our current home lending is on the 2-year rate so we know this is a popular term for customers.”