Another week, another rate cut. This time from an unexpected source, The Co-Operative Bank. As a smaller New Zealand owned bank, The Co-Operative Bank relies on domestic deposits, which means that lowering mortgage rates and deposit rates have always been a tough balance.
However, this week we saw their latest announcement of 3.49% for 6 months and one year, 3.89% for three years and 3.99% for four years. Bank of China is still the lowest in the market with 3.15%, but this new cut from The Co-Operative Bank makes them more competitive when compared to their direct competitors which are the big five banks. Kiwibank is the next closest with 3.55% for one year.
Whether the gamble is going to pay off or not for The Co-Operative Bank will be intriguing to watch, as the top 5 banks still hold a stable two-year rate of 3.49%. For clients who like to support a Kiwi owned bank, this new cut does give them more options.