BNZ goes below 7 per cent mortgage barrier

BNZ is throwing down the gauntlet to other banks in slashing its lowest mortgage rate today to below 7 per cent.

The 'mortgage rates war' was a key battleground four years ago when BNZ and ASB went at it hammer and tongs in the spring of 2004.

That tussle over 2 year fixed rates gave the housing market a second wind that did not run out until the end of 2007 and hamstrung the Reserve Bank's efforts to slow the economy.

The difference this time is that the battle is around the variable and 6 month rates and could restore some the Reserve Bank's monetary policy powers and lift the economy as it heads towards a difficult 2009.

BNZ has announced a new 6.99 per cent 6 month mortgage rate that makes it the lowest in the market, beating even Kiwibank's lowest rate of 7.29 per cent for one year and Westpac's lowest rate of 7.19 per cent for 18 months. ANZ and National's lowest rate is 7.3 per cent for one year, while ASB's lowest rate is 7.35 per cent for 6 months

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To read the full NZ Herald story, click here

Posted: 24 Nov 2008

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