Banks pass on floating rate cuts after OCR decision

Major banks have passed on rate cuts of 0.75% to floating rate borrowers following the Reserve Bank's emergency rate decision.


Westpac was the first major lender to announce its position after the central bank cut the official cash rate by 75 basis points for at least 12 months.

Its Choices Floating and Choices Offset Floating interest rates have been reduced by 75bps to 4.59%.

Westpac's Choices Everyday interest rate has been reduced by 75bps to 4.69%.

The variable rate changes are effective from Wednesday for new customers, and from April 1 for existing customers.

Westpac said its fixed rates "remain under review".

The Reserve Bank's extraordinary move went further than most analysts had predicted, and comes as the Government is set to unveil an economic stimulus package this week following the Covid-19 outbreak. 


ANZ has announced it will pass on the full 0.75% to its floating and flexible home loans rates.

ANZ's floating home loan rate will drop from 5.19% to 4.44%. Its flexible rate will drop from 5.30% to 4.55%.

The new rates will take effect from March 19 for new floating rate home loans, and April 2 for existing floating rate and flexible home loans.

ANZ's managing director for retail Ben Kelleher said the OCR cut was a "response to extraordinary economic conditions".

"The current extreme low interest rate environment provides an opportunity for home loan customers to save and repay home loan debt," Kelleher added.

Kelleher said ANZ was "concerned about the impact lower interest rates will have on savers, whose deposits provide much of the funding for our lending, so we are cautiously reviewing deposit rates to balance the needs of savers and borrowers".


Kiwibank, meanwhile, has also announced floating rate changes.

The state-owned lender will reduce its floating home loan rate from 5.15% to 4.40%.

The Kiwibank variable rate sits at 4.40%, its revolving rate at 4.45%, and its offset rate at 4.40%. 

Kiwibank chief executive Steve Jurkovich said: "At Kiwibank, our commitment is to support our customers and the wider New Zealand economy as the Covid-19 situation evolves. Like the Government and businesses across New Zealand, we're doing what we can to try to respond to the evolving situation."


ASB has also announced rate cuts.

The bank's variable home loan rate is reduced from 5.20% to 4.45%. Its Orbit home loan rate is reduced from 5.30% to 4.55%.

"We’ve made a deliberate choice to pass on the full official cash rate cut to our customers so we can support them during this period of uncertainty. We want our customers to know ASB is here for them, and will be doing our best to help their financial wellbeing over this time," said Craig Sims, ASB executive general manager, Retail.

ASB's changes are effective on March 18 for new customers and March 25 for existing ones.


SBS Bank has also introduced rate cuts, available from March 20 for new customers, and April 20 for existing customers.

SBS's standard floating rate drops to 4.54%. Its low equity rate also falls to 4.54%. The rates become effective on Friday. 

The Co-operative Bank

The Co-operative Bank outlined its own floating rate cuts on Monday afternoon. 

Owner-occupier floating rates fall to 4.40%, while revolving credit rates also drop to 4.4%. 

Standard floating rates fall to 4.4%, and revolving credit rates also 4.4% at the standard rate. 

TSB Bank

TSB also got in on the action, and has slashed its variable rate to 4.54% for people with a 20% deposit.

Those with less than a 20% deposit will get a TSB rate of 5.34%. 

TSB's new rates are effective on March 18 for new customers, and April 2 for existing customers.


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