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Mortgage rates on their way down - Kiwibank joins in


Mortgage rates are on the way down today, with two banks - Westpac and Kiwibank, cutting rates in anticipation of another Official Cash Rate cut.

Kiwibank says it has today cut its variable home loan rate to 7.95 per cent - what is says is "significantly less than the big Australian-owned banks."

Kiwibank chief executive Sam Knowles said it was clear there would be a substantial cut to the Official Cash Rate in early December and the bank "didn't want to sit and wait".

"We take pride in being fast to cut home loan rates and slow to increase them. Today we are cutting our variable and all shorter term rates."

The new variable rate is effective immediately for new customers and in two weeks for existing customers. The new fixed rates take effect immediately.

Today's Kiwibank move comes after Westpac this morning cut its floating and most fixed interest rates for home loans by 0.75 per cent. Its floating rate is at 8.7 per cent.

The Westpac reduction applies to base business banking rates and credit card interest rates.

Westpac New Zealand acting chief executive Bruce McLachlan said the decision followed a significant easing in wholesale rates over the past week.

"We are pleased to be able to pass on to consumer, business and farming clients the benefits of an easing in wholesale rates, and we want to send a strong signal, by doing this, that we are open for doing good and fair business with our customers who are facing a tough economic environment," he said.

The reduction has been made in anticipation of a widely-predicted Reserve Bank cut to the official cash rate on December 4.

"This cut is already being priced into the wholesale rates," said McLachlan.

"We're all aware of the financial pressure that many people are experiencing in the current economic climate; in some cases, this pressure is significant.

"We are committed to supporting our customers as much as possible during this time, and today's announcement will be great news for many of them."

Other big banks yet to make any cut to their rates include the ANZ/National Bank, which has a floating rate of 9.45 per cent and the ASB, which also charges 9.45 per cent.