Mortgages
Interest rate forecast – Where are interest rates heading?
Discover where interest rates are headed in 2024 and beyond so you can make informed decisions for your property portfolio.
Mortgages
1 min read
Author: Ed McKnight
Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.
Reviewed by: Peter Norris
Mortgage broker for over 10 years, property investor and Managing Director at Opes Mortgages
Banks have been rapidly slashing rates since the Reserve Bank first dropped the OCR to 5.25% on August 14
There have been so many cuts that we’re launching an interest rate cut counter.
This counts how many times banks have cut their interest rates. It also tells you which rates are falling fastest.
After all, banks have made large cuts in 2024, and there could be more to come.
This is great news for homeowners who've been battling those 7%-plus interest rates.
Since the start of 2024, Westpac has cut its interest rates most. In total, they have made 52 cuts to their interest rates. They get the crown as the 'King of Cuts.'
That’s followed by ASB and BNZ on 51 and 46 cuts each.
Here are all the cuts. This table automatically updates every morning, reflecting the latest interest rate changes.
On the other hand, Kiwibank has cut their interest rates the least (when it comes to the total number of cuts). They have only cut their interest rates 38 times since the start of the year.
To take you through how it works. If a bank cuts its 1-year and 2-year rates on the same day, that counts as 2 cuts.
Though, you don't only care about the total number of cuts. Because if a bank trims 1% off their interest rate, that has the same effect as if a bank cuts 0.1% off a rate 10 times. So let's dig into the size of the cuts.
TSB’s 2 year rate has had the biggest cut.
At the start of the year, they advertised 7.09% for their 2 year rate. This is now 5.79%, at the time of writing.
That’s a total drop of 1.30% percentage points. That could save you $98 a week on a $500k mortgage (on a 30 year term).
ANZ has trimmed the most off of all their interest rates since the start of the year.
They have cut a combined 8.37% off all their interest rates so far.
Kiwibank has been more conservative, trimming only 6.91% from all their rates so far.
Though, as the Reserve Bank continues to cut the OCR, expect the cuts to continue.
Also, keep in mind that Kiwibank doesn't have an 18-month rate. That disadvantages them in this analysis, since they have one fewer interest rate to cut. That's why I initially excluded Kiwibank from the interest rate cut counter. But, they called me and specifically asked to be included.
The 1 year rate has received the most cuts. All up, the banks have cut the 1 year rate 39 times this year.
ANZ is among the banks that have cut this rate that most. On a $500k mortgage (over 30 years) that saves $92 a week.
But the 2 year rate is not far behind with a total of 35 cuts.
In comparison, the floating rate hasn’t been cut much at all.
Across all the banks, it has been cut only 11 times. The biggest cut being only 0.75% percentage points.
On a $500k mortgage (over 30 years) that saves only $61 a week.
Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.
Ed, our Resident Economist, is equipped with a GradDipEcon, a GradCertStratMgmt, BMus, and over five years of experience as Opes Partners' economist. His expertise in economics has led him to contribute articles to reputable publications like NZ Property Investor, Informed Investor, OneRoof, Stuff, and Business Desk. You might have also seen him share his insights on television programs such as The Project and Breakfast.