Cuts to mortgage rates - other rate cuts to come

Westpac cuts mortgage rates - signals other rate cuts to come
Thursday, 29 January 2009
Press Release:Westpac New Zealand

Westpac New Zealand has announced cuts to a range of its mortgage lending rates and has signalled rate cuts in other areas are to come.

The bank will cut its variable (floating) home loan rate to 6.89%p.a. from 7.49%p.a., representing a total 1.26% reduction announced in the past fortnight (a 0.66% drop was announced on 17 January). The rate change is effective for all new customers from 10 February and for existing customers from 24 February following a notification period.

Westpac has also announced a range of cuts to its fixed rates, effective from tomorrow.

Term Rate From
6 month 6.19%p.a. 6.99%p.a.
1 year 5.79%p.a. 6.80%p.a.
2 year 5.89%p.a. 6.85%p.a.
3 year 5.99%p.a. 6.99%p.a.
4 year 6.40% p.a. 6.99%p.a.
5 year 6.50% p.a. 6.99%p.a.

Acting Chief Executive Bruce McLachlan said: "Westpac is aware of the responsibility it has as a major bank and is committed to doing what it can to support its customers as well the economy. Mortgage rates impact a lot of people so we are pleased to be able to pass through what amount to significant interest rate reductions."
Since October, Westpac has cut 4.06% off its variable home loan rate and 3.16% off its one year fixed term home loan rate.

"It should be remembered that the Official Cash Rate is not the specific rate at which we fund our lending business, although it does influence funding costs. Retail interest rates need to be viewed in the context of, among other things, a dramatically worsening international marketplace resulting in a higher relative cost of funds that we need to manage," Mr McLachlan said.

"The OCR rate move, however, does provide scope for Westpac to review other pricing, such as that applying to our business and agri lending, overdrafts and credit cards, with our intention being to pass through interest rate reductions in those areas too."

ENDS

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