Home loan price war breaks out

BNZ started things a week ago when it widely advertised a promise that it will have “the lowest advertised two-year fixed home loan rate of the big four banks.”

Technically the claim was true as the fine print named the competition. However at the time ASB-owned Bank Direct was matching BNZ with a 7.40% two-year rate.

Then on Friday morning ASB moved to match BNZ at 7.40%. BNZ has responded dropping its rates another 5 basis points to 7.35% (although this is still unannounced).

New Zealand’s biggest non-bank lender, Sovereign, which is a sister company to ASB, jumped in on the game and dropped its two and five year rates.