Two year home loan war ending
Borrowers are facing significantly higher interest rates as the intense battle by lenders to win business in the home loan market comes to an end.
Saturday, December 18th 2004, 5:02PM
Bank of New Zealand which started the war by offering what it called an "unbeatable" two year home loan rate finished that promotion on Friday afternoon. It has set all its fixed rates at 7.60%, meaning its two year rate has risen 70 basis points over the weekend.
With the knowledge that BNZ was ending it campaign other banks and lenders have been quick to move.
Westpac made its intentions clear last Monday that the "unsustainable" price war had to end. It moved its 18 and 30 month rates up more than 40 points each on Friday to 7.40% and 7.65% respectively.
The National Bank has moved just its two year rate from 7.05% to 7.60%.
ASB Bank also moved on Friday setting all its fixed rated at 7.70%. Meanwhile sister company Sovereign set all its fixed rates at 7.85%.
BNZ, although raising rates continues to be aggressive. It says it has done well over spring and more good rates are coming next year.
"Bank of New Zealand sold a record number of two-year fixed rate home loans in spring 2004," general manager for personal financial services Blair Vernon says.
"There’ll be more great home loan deals from Bank of New Zealand in 2005."
Just to add some confusion to the picture a number of non-bank lenders have dropped their one and two year rates, meaning that the spread between rates on offer in the market is beginning to narrow. Organisations to move include Asteron, Cairns Lockie, General Finance, Pacific Home Loans, Premier and Wizard. To compare all the rates on offer go to Good Returns Mortgage Rates page here
The following table shows some of the rate changes.
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