Photo: RNZ
Within minutes of the Reserve Bank's announcement that it was cutting the official cash rate by 50 basis points, the main banks had started passing the cut on to some borrowers.
BNZ
BNZ said it would pass the full OCR cut on to variable home loan rates.
It had already cut its six-month fixed home loan rate to 5.99 percent last week.
BNZ spokesperson Karna Luke said although the 50-basis point cut to the OCR was widely expected, the announcement was welcome news.
"With Christmas approaching and many households managing their budgets carefully, lower interest rates should help make a difference for New Zealanders."
ANZ
ANZ, the country's biggest bank, is also making changes. Its floating home loan rate will fall to 7.39 percent from 7.89 percent. Flexible home loan rates will drop from 8 percent to 7.5 percent.
Managing director for personal banking Grant Knuckey said: "It's been a tough year for the New Zealand economy and for many of our customers. Hopefully, the interest rate changes will provide some relief as we head into the Christmas season."
He said interest rates were driven by factors including the official cash rate and changes in wholesale rates.
ANZ announced drops of between 10 basis points and 26 basis points on Tuesday, taking its 18-month special to 5.59 percent and its six-month special to 6.24 percent.
It will also cut its Serious Saver interest rate from 3.75 percent to 3.25 percent.
Westpac
Westpac said it would pass on a 50 basis point cut to floating rates and would cut a number of fixed home loan rates.
That would include a 20 basis point drop on its one-year special rate to 5.79 percent and a 16 basis point drop in the two-year special, to 5.49 percent.
Some term deposit rates would also be reduced.
"Today's OCR cut will bring further relief for homeowners, businesses, farmers and growers," Westpac NZ spokesperson Sarah Hearn said.
"We've cut our advertised floating housing rates by 1.25 percent following recent OCR reductions, with potential interest savings of $118m for our 62,000 floating home loan customers over the next 12 months."
ASB
ASB is also dropping variable rates by 50 basis points.
Executive general manager of business banking Rebecca James said more than 110,000 New Zealanders had some form of floating loan with ASB and would benefit from the drop.
"This year we've dropped variable rates by 125 basis points, translating to more than $170 million in savings annually back in customers' pockets."
ASB said its servicing rate, which it uses to test whether customers can afford loans, would drop to 7.6 percent from Monday.
ASB would also cut savings rates - its on call savings interest rate will drop from 2.15 percent to 1.65 percent and its youth account Headstart would have its interest rate cut from 4.15 percent to 3.65 percent.
Kiwibank
Kiwibank was also passing the cut on to floating rates, and would lower its test rate from 8 percent to 7.5 percent.
Other banks
The Co-Operative bank cut 70 basis points from its floating interest rate, taking it to 6.95 percent, which it said was the lowest in the market.
TSB cut its variable home loan rate by 50 basis points to 7.39 percent.
