“For someone moving from our current average one-year rate of 5.19% per annum, with a $500,000 mortgage over a 25-year term, this new rate could save over $2400 across the 12-month fixed period.
“At 4.49%, this is a nearly 40% drop from the February 2024 peak of 7.35% for the one-year fixed term – proving real relief for households.”
Luke said BNZ was seeing strong customer demand for its one-year fixed home loan rate.
“We know household budgets remain tight for many New Zealanders, and these changes will help reduce mortgage payments, whether you’re buying your first home, moving from another bank, or refixing an existing BNZ home loan.”
The Reserve Bank (RBNZ) will make its next Official Cash Rate (OCR) decision on October 8.
The OCR sits at 3%, having fallen by 250bps since August last year, when it was 5.25%.
The RBNZ shifted its outlook at its last meeting to recognise that the economic recovery has stalled. Two more rate cuts are now expected by March 2026.
BNZ head of research Stephen Toplis said “the RBNZ is back on the warpath”.
“We maintain our view that a further 25-point reduction will be delivered in October. We now add to that expectation a final 25-point cut at the November statement, taking the low in the cash rate track to 2.5%.”