Kiwibank Offers Lowest Mortgage Rate in a Decade

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Auckland mortgage brokers, Clear Path Financial Services Ltd see spike in home loan enquries as Kiwibank continues to go head to head with other lenders over who can provide the lowest mortgage rates.

The New Zealand state owned lender Kiwibank, which many thought would flop, has just launched its most competitive mortgage rate in it’s 11 year history.

The six month fixed rate now stands at 4.79 per cent. It’s nearest rival SBS has a rate of 5.10 per cent and last Monday Westpac reduced its one-year rate to just 4.89 percent.

Mortgage Broker Wendy Sim said she hadn’t seen a mortgage rate war quite like it.

“For those who qualify for a mortgage it can now often be cheaper to pay off a home loan than it is to rent “ Mrs Sim said.

In January ASB slashed their three rate by 0.15 per cent, but increased their two-year rate by 0.20 per cent.

The Auckland property market is still hot Mrs Sim said. “There are still bargains to be had however. These low interest rates make getting into a new home more affordable than ever.”

Graeme Wheeler the Reserve Bank governor, last week did not change the official cash rate keeping it at 2.5 per cent, but indicated that rising house prices were a big concern to New Zealand’s overall financial situation.

Unlike the conditions imposed by some other major banks Kiwibank said, that there was no minimum lending requirement but that it was a “limited time special”. Whilst some of the banks were offering very competitive rates they were conditional upon 20 per cent equity and a minimum level of borrowing.

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