New record low fixed rate at 2.55%
Bank of China has launched New Zealand's latest record-low fixed home loan, offering a one-year mortgage at 2.55%.
Friday, June 5th 2020, 1:57PM
The rate is the sharpest in the market by 10 basis points, ahead of Kiwibank's 2.65% rate.
However, few advisers in New Zealand have access to Bank of China loans, according to industry sources.
The one year rate is one of the cheapest ever offered in New Zealand.
KiwiSaver provider Simplicity's floating 2.5% mortgage is the lowest in the market. However, the loan is only available to existing customers through a ballot system.
Bank of China's has also cut special rates across the board, with 18 month and two-year fixed rates at 2.65%, matching HSBC Premier.
The bank's 18 month rate is 14 basis points cheaper than BNZ's 2.79% 18 month rate, while the 2.65% two year rate is cheaper than ASB, BNZ, TSB and Westpac's 2.69% rate.
The rate drop is likely to ramp up more pressure on the big four banks to cut mortgage rates further. While wholesale interest rates have edged up in recent weeks, economists predict the Official Cash Rate is likely to fall again in this cycle.
The Reserve Bank has pushed for lower retail rates since slashing the OCR to 0.25%, but says it will not make further rate cuts until next year.
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