The rate drop we didn't see coming

View looking up at tall buildings and blue sky

Banks are starting to drop their interest rates with ANZ taking the first stance at 2.79% for one year and 2.95% for two years, and naturally the other mainstream banks are following suit.

Today Westpac announced their new interest rate of 2.79% for one year, matching ANZ while also dropping their two year rate to 2.79%.

However, there were two more announcements that we didn’t see coming.

ASB is dropping their two-year rate to 2.69%. This is the lowest across all banks, thus making them possibly the most attractive lender in the market.

BNZ took a different approach by dropping both their three-year and four-year interest rates to 2.99%. It doesn't help that BNZ has tightened up its lending policy, but this is the first time we've seen so many options available sub 3%.

Will this be the lowest we’ll see going forward, or will Kiwibank make their announcement soon that will drive this rate war even lower? Watch this space.

How does this impact me?