New Benchmark For Two-Year Home Loans At 6.99%

New Benchmark For Two-Year Home Loans At 6.99%

Media Statement

For Immediate Use

13 February 2004

HOME LOAN RATE CUTS: BANK OF NEW ZEALAND SETS NEW BENCHMARK FOR TWO-YEAR HOME LOANS AT 6.99%

Bank of New Zealand today announced that it is cutting the interest rates for almost all of its fixed-term home loans, with the biggest cut – 0.41% - on two-year terms. The new two-year rate offered by Bank of New Zealand – 6.99% per annum – sets a new market benchmark for two-year rates.

The cuts are effective from Monday, 16 February.

The new two-year rate with Bank of New Zealand will fall below the key 7.0% mark, to 6.99%, making Bank of New Zealand the lowest-priced lender for two-year terms.

Bank of New Zealand’s two-year rate will be up to 0.41% lower than other major lenders. For example, Westpac’s fixed two-year rate, is 7.40%. National, ANZ, and ASB’s two-year rates are 7.30%.

Bank of New Zealand’s general manager of business development, Andrew Whitechurch, said the cuts would further increase Bank of New Zealand’s competitiveness in the home loan market.

“Our aim is to bring customers lower rates where we can. With variable rates rising, these cuts for fixed rates are intended to offer borrowers more options in their home loans.”

Other new rates that will apply from Monday (with the current rates in brackets) are:

- 3 years: 7.50% (7.60%)
- 4 years: 7.60% (7.70%)
- 5 years: 7.65% (7.75%)
- 7 years: 7.75% (7.85%)

The new fixed rates can also be applied to a new loan that Bank of New Zealand has been marketing, Ultimate Home Loan. Under Ultimate Home Loan, borrowers must take a minimum of 25% of the loan at the variable rate and the remainder at a fixed rate. In exchange, Bank of New Zealand will cut the variable rate by 0.25% (i.e. to 7.25%). Bank of New Zealand will also waive establishment fees for loans over $150,000.

“With a package like Ultimate Home Loan, borrowers get the benefit of our lower fixed rates and a discount on our variable rate. It goes to show that customers can still get very good deals despite the fact that interest rates are generally rising,” Mr Whitechurch said.

Ends

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