BNZ and Westpac slash home loan rates following OCR cut

BNZ and Westpac New Zealand are cutting home loan rates after the OCR dropped by 50 basis points, offering financial relief to New Zealand households and businesses.

BNZ has announced a reduction in its standard variable home loan rate, passing on the full 50bp cut from the latest OCR adjustment. This follows a previous cut to its six-month fixed home loan rate, which now sits at 5.99%.

Karna Luke (pictured above left), BNZ executive of customer, products, and services, welcomed the reduction, particularly as many households prepare for the holiday season.

“With Christmas approaching and many households managing their budgets carefully, lower interest rates should help make a difference for New Zealanders,” Luke said.

Additional rate changes include adjustments to BNZ’s Total Money, Rapid Repay, and Mortgage One rates, alongside a 45-basis point reduction to the Rapid Save rate, now at 3.75%.

The changes will take effect from Nov. 29 for savings accounts and Dec. 11 for variable home loan rates.

Westpac NZ is also lowering rates for its home and business loan customers, including agricultural sectors, in response to the OCR cut. Floating home loan rates have been reduced by 0.5%, with advertised fixed rates also seeing decreases.

Notably, the one-year special rate has dropped by 0.2% to 5.79% p.a., while the two-year special rate now sits at 5.49% p.a.

Sarah Hearn (pictured above right), Westpac’s general manager of product, sustainability, and marketing, stressed the benefits of these reductions.

The “OCR cut will bring further relief for homeowners, businesses, farmers, and growers,” Hearn said.

Floating home loan customers alone could save $118 million collectively over the next year.

The Reserve Bank’s 50bp reduction has brought the OCR to 4.25%, as inflation approaches its target range of 1%–3%. Before the decision, markets had anticipated a 50 basis-point cut, with ASB and Kiwibank economists describing it as “the path of least regret” and “the right thing to do.”

Economic growth is expected to recover in 2025, driven by lower interest rates encouraging investment and spending.

Despite the optimism, Hearn acknowledged the challenges ahead, particularly with rising unemployment.

“We’re here to help in any way we can, so customers who are worried about their finances should get in touch sooner rather than later,” Hearn said.

Both BNZ and Westpac are focusing on easing financial pressures for customers while navigating a subdued global economy and domestic financial challenges.

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