It may lead the market, but the rate is just one basis point below what Kiwibank has been offering customers for some time.

The move to split the card across all fixed and floating rates is in response to the Reserve Bank’s LVR requirements and to help make the decision making process easier for customers in assessing  what options are available to match their circumstances.

The introduction of the new 5.64% standard floating rate for new lending is designed to give a competitive floating option for customers with more than 20% equity, the bank says

General manager retail, Ian Blair, said as conjecture on when the official cash rate might move continues, more customers are looking at their options and splitting their loan to take advantage of rate certainty (fixed) and repayment flexibility (floating).

“At 5.64%, our floating rate is very similar to our two year fixed term special rate (5.59%), which is a popular one. This is about giving customers competitive choice in how they structure their home loans.”With the splitting and simplifying of the card, the 25 and 50 month terms for high LVR borrowers are no longer needed. Instead, fixed rates are available for all terms from 18 months to five years along with floating and capped one and two year term options. Customers can choose to offset their transactional and savings balances against their standard floating loan balance to save on interest.