NZ: Westpac New Zealand slashes 5-year mortgage rate

Westpac New Zealand (NZ) has cut its five-year mortgage “special” rate to 4.99% and in doing so, has become the market leader for that term.

The move makes Westpac’s mortgage rate the lowest advertised rate for that period from a bank, having reduced the five-year fixed-term mortgage rate by 60 basis points.

The next best advertised five-year mortgage rate from a bank is HSBC’s “premier” rate of 5.29%, followed by Kiwibank’s fixed-rate of 5.39%.

According to research conducted by RFi Group, 11% of borrowers would consider switching their mortgage institution if they saw a lower mortgage rate difference of 0.25 and 0.49 percentage points.

Another 20% of borrowers would consider switching their mortgage if they saw a lower mortgage rate difference of more than 1.00 percentage points at another institution.

For Bank of New Zealand customers who have a five-year fixed-term mortgage rate of 6.09%, Westpac’s “special” rate may be an attractive reason to switch mortgage institutions.

Westpac NZ’s special 5-year fixed mortgage rate comes into effect on Friday, August 24, 2018. Customers applying for the offer must have a loan-to-value ratio of less than 80%.

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