ASB lowers the interest rate on two-year mortgage loans

Borrowers have become accustomed to rising mortgage rates, but ASB has gone the other way by lowering its fixed rate to two years.

Kirk Hargreaves / Stuff

Borrowers have become accustomed to rising mortgage rates, but ASB has gone the other way by lowering its fixed rate to two years.

ASB lowered its two-year fixed mortgage rate from 4.35% to 4.15%.

The bank said it was following a drop in its funding costs due to movements in the money markets.

Craig Sims, executive director of retail banking, said the change gave homebuyers options in a rising rate environment.

“It has been a difficult year for many,” he said.

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The big rival banks of ASB, ANZ, Westpac, Kiwibank and Bank of New Zealand, all charged 4.35% for their two-year fixed rate home loans for people with 20% or more equity in their home. .

Finance and Expenses Committee / Facebook

Reserve Bank Governor Adrian Orr expressed concern in August about the situation recent homebuyers may soon find themselves in, and since then prices have been rising rather than falling.

The two-year fixed rate gave borrowers the flexibility to pay off part of their mortgage costs, Sims said.

The Reserve Bank of New Zealand, Te Pūtea Matua, has warned that homeowners are facing rising mortgage rates.

Its data shows that the new two-year average rate fell from 3.47 percent in June to 4.22 percent in October.

A 25-year mortgage of $ 500,000 would cost $ 1,262 biweekly at 4.35% and $ 1,237 at 4.15%.


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