Interest rate cuts have left borrowers “sitting pretty” and that is likely to mean a boost for the housing market, economists say.
ANZ and Kiwibank both moved quickly to introduce reductions on their home loan rates by up to 15 basis points. Westpac cut its floating and one-year rate by 16 basis points.
ANZ’s and Westpac now have a one-year rate of 3.89 per cent. Westpac’s two-year rate dropped four basis points to 3.95 per cent.
The bank expects annual house price growth of 3.9% this year, from 3.8% last year, and 5.5% next year for the country as a whole.
But while it’s good news for borrowers, it’s not so good for savers.
Kiwibank’s variable rate deposit products, Notice Saver and Online Call, decreased by 15 basis points.
ANZ is also cutting what it pays on term deposits by between 15 basis points for the 90-day rate and 15 basis points for the 60- and 120-day terms.
Westpac reduced its 90-day and four-month rates by 15 basis points. Its five-month term will drop by 20 basis points and term deposits between six and nine months drop by 10 basis points.
Its savings accounts were also affected.