In a move that will result in interest savings of $20 million for more than 35,000 thousand home loan and business banking customers, Kiwibank today announced it is reducing its variable lending rates by 1% (100bps).
Kiwibank Chief Executive Steve Jurkovich said the cut would reduce the pricing gap between fixed and variable rates, giving Kiwibank customers greater flexibility, choice and savings – providing an opportunity to pay back their loans faster, save, or buy local and support New Zealand’s economy.
“The founding vision of Kiwibank was to be a challenger, providing New Zealanders with a real alternative to the big Australian-owned banks and support the growth and progress of all New Zealanders.
“This reset demonstrates how the largest New Zealand owned bank can, and will, continue to lead the New Zealand financial services industry by being a better banking alternative that’s committed to being fair and easy for Kiwis, the businesses they own, and for future generations.”
Mr Jurkovich highlighted that a customer with a $400,000 variable loan would be $100 a fortnight better off.
“Of course, many customers choose a mix of variable and fixed loans, and as a result of today’s reset, they could enjoy competitive rates and flexibility in an unprecedented way. The new variable rates will also be a good option for first home buyers who don’t have 20% equity.”
Today’s changes to the variable rate come into effect for existing customers on 29 June and for new customers on 15 June.
Kiwibank customers on variable rates will automatically benefit from the changes. Customers coming off fixed loans and new customers can take advantage of the lower, flexible rates through Kiwibank’s website: www.kiwibank.co.nz/reset.
Lending rate changes
|
Product |
Current rate p.a. |
New rate p.a. |
Change |
|---|---|---|---|
|
Variable Home Loan |
4.40% |
3.40% |
-1.00% |
|
Revolving Home Loan |
4.45% |
3.45% |
-1.00% |
|
Offset Mortgage |
4.40% |
3.40% |
-1.00% |
|
Business Variable Loan – Housing Secured |
4.90% |
3.90% |
-1.00% |
|
Business Variable Loan |
6.50% |
5.50% |
-1.00% |
|
Business Revolving |
7.75% |
6.75% |
-1.00% |
|
Business Overdraft |
8.50% |
7.50% |
-1.00% |
Notes to editors
Kiwibank
Kiwibank is New Zealand’s bank and supports the growth and progress of all New Zealanders. Kiwibank was formed 20 years ago to be a credible local banking alternative. It is now the largest of the New Zealand-owned banks, with over a million customers.
What is a variable interest rate?
With a variable rate, the interest you pay on your home loan can go up or down as interest rates rise and fall.
Pros and cons
- You have the flexibility to increase regular payments or make lump sum repayments of any size without cost.
- If interest rates go down, you can pay off your loan faster by keeping your repayments at the same level.
- If the interest rate goes up, your repayments are likely to go up too.
Media contact: External Communications Manager Kara Tait 027 475 3521