PHOTO: FILE
Kiwibank and BNZ have joined ASB in reducing home loan rates.
BNZ has decreased its rates for six-month and one-year terms by 5 to 10 basis points, now at 7.24 percent for six months and 7.14 percent for one year.
Kiwibank is lowering its special six-month fixed rates by 10 basis points to 7.25 percent for the special rate and 8.25 percent for the standard rate. The special one-year rate is dropping by around a quarter of a percentage point to 6.99 percent, while the standard one-year rate has fallen to 7.99 percent. Kiwibank is also adjusting some term deposit rates by 5 to 10 basis points, with its one-year rate for deposits over $10,000 at 5.90 percent and under that at 5.80 percent.
Last week, ASB reduced several fixed home loan rates by up to 10 basis points.
These adjustments coincide with industry expectations that inflation will return to the Reserve Bank’s target band in the next year. A quarterly survey commissioned by the RBNZ indicates a forecasted decrease in inflation from 3.22 percent to 2.73 percent over the next 12 months, the lowest since September 2021. Though based on a limited number of respondents (37), the RBNZ considers the survey credible for gauging opinions on inflation and interest rates.
Westpac senior economist Satish Ranchhod notes that while the RBNZ’s policies appear effective, inflation remains stubborn, as evidenced by recent figures. Despite the decrease in inflation expectations, Westpac forecasts a gradual decline in inflation, not expecting rate cuts until early next year.
The RBNZ will review the OCR next week, with expectations leaning toward maintaining it at 5.5 percent.