Home loan rate cut to lowest in 40 years

The ASB Bank has slashed its floating home mortgage rate to a 40-year low of 5.75 per cent.

The new variable rate is the cheapest on the market and is thought to be the lowest available to home buyers for decades.

Last night, one leading economist tipped that other banks would follow suit.

But the outlook remains mixed both for house buyers and for savers looking for higher deposit rates, because the ASB also intends to raise longer-term fixed rates.

ASB retail banking chief executive Ian Park said the bank planned to increase 12-month to five-year fixed mortgage rates shortly. He cited the rising cost of long-term borrowing overseas.

The bank said its floating-rate cut was passing on the lower cost of short-term overseas funding to customers.

To read the full NZ Herald story click here

Posted: 5 Sep 2009

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