Kiwibank has announced cuts of 1% from its floating rate mortgages, covering its home loan and business products. The bank says the floating rate cuts will result in "repayment savings of $20 million for more than 35,000 home loan and business banking customers".
The bank says the move will "reset" the lending market and bring floating rates closer in line with fixed mortgages. The cuts cover Kiwibank's variable, revolving and offset loans.
Kiwibank chief executive Steve Jurkovich said the move proved Kiwibank was "a real alternative to the big Australian-owned banks".
Jurkovich added: "This reset demonstrates how the largest New Zealand owned bank can, and will, continue to lead the New Zealand financial services industry by being a better banking alternative that’s committed to being fair and easy for Kiwis, the businesses they own, and for future generations."
The changes don't come into effect for new customers until June 29, but are available for new borrowers from June 15.
Mortgage rates continue to fall to historic lows as the Reserve Bank pushes for cheaper loans amid the Covid-19 crisis.
ANZ followed up recent cuts by slashing its fixed rate standard and special loans today.
ANZ's one year rate is now available at 2.65%, the cheapest on offer from an Australasian bank, and the same rate as Kiwibank.
The major bank has also slashed its two-year special to 2.75%, six basis points higher than its big-four rivals.
In addition, the lender has reduced rates across its standard home loan lineup, with one, two, four and five-year rates all cut this morning.
Chinese bank ICBC continues to push rates downwards. Effective tomorrow, its one-year rate falls to 2.58%. Its two-year rate drops to 2.68%.
It comes after rival lender Bank of China has launched New Zealand's latest record-low fixed home loan, offering a one-year mortgage at 2.55% last week.
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