Last week, ASB cut its 1-year rate to 2.25% and its six-month rate to 2.99%. But its rates for three, four and five-year loans went up to 2.89%, 3.19% and 3.39% respectively. AIA's lending rates matched those of ASB's.
Following the ASB rates move Westpac made some similar changes on Friday with its one-year special rate dropping to 2.29%. Westpac's two-year special rate dropped to 2.59% but its three, four and five-year special rates went up to 2.89%, 3.19% and 3.39% respectively.
The BNZ announced yesterday it was removing its unique fixed seven-year 5.20% home loan rate - introduced in 2005 - from the market due to no one taking up the offer since 2018.
Elsewhere, the TSB also cut its one-year rate to 3.05% and its special rate to 2.25% but made no other changes to its long-term rates of between 3.29% and 3.79% and its special rates of between 2.49% and 2.99% for fixed-term loans of up to five years.
Economists nationwide are predicting short-term interest rates to remain steady as inflation climbs toward 2% after a slight rise in the March quarter.
However, as predicted earlier this year, long-term rates are expected to climb slowly due to worldwide economic uncertainty brought about by the Covid-19 pandemic.
On April 14, the Reserve Bank held the official cash rate at 0.25% saying it was prepared to go lower if required.
Reserve Bank governor Adrian Orr said in his Monetary Policy Review the global economic outlook had continued to improve since February.
"However, economic uncertainty remains elevated and divergences in economic growth both within and between countries are significant."
ANZ’s latest Property Focus report also suggests there are tentative signs of cooling in the New Zealand housing market.
“Recent policy announcements represent new downside risks to the housing outlook but at this early stage, it’s difficult to tell if the anecdotes we’re hearing about investors throwing in the towel are representative or not,” the report states.
“Affordability and credit constraints mean the recent pace of house price inflation was never going to be sustainable, but now, with the policy headwind about to start biting harder, we think the slowdown is looming.”
