Effective as of today, ASB’s one-year fixed rate has reduced to 3.55%, while their two-year rate has reduced to 3.45%.
As predicted, ASB is merely matching what the other top 5 banks are doing, in fear of losing business if they don't follow suit, especially as we head deeper into spring.
It seems that none of the big banks are brave enough to take on the Chinese banks or really grasp the pole position as the market-leader amongst the top five. With all of them now offering one-year 3.55% and two-year 3.45%, the movements they've recently made have been a waste. Right now, there isn't a point of difference between what the banks are offering. Yes, we can look further into things like cash contribution that a client may get for signing up to a bank, but judging by the lack of margins they are prepared to cut, we'd assume that the cash contribution will also be the same.
Right now, Kiwibank is offering $3,000 cash, with the condition of having a minimum 20% equity and minimum new lending of $250,000. But is that the best we're really going to see?
Will we see lower rates before the end of the year? We think that it's unlikely. But going into mid-January, when business and the market gets over the holiday period, we may start to see further cuts and more competitive moves.