BNZ has announced a 26 basis points reduction in floating rate, further intensifying the ongoing mortgage war among lenders. BNZ beats Westpac, which recently reduced interest rates, cutting down floating rates to 5.59%, the lowest level of interest rates available in the market. Other variable mortgage rates also declined 31 basis points to
5.99%.

Westpac interest rates stand at 5.69%; while ASB reduced rates to a 40-year low of 5.75%, with its Rapid Repay and Mortgage One rates now standing at 5.99% and 6.40% respectively.

Existing customers of the bank would avail changes to the Rapid Repay and Mortgage One products from 19 September, while changes to the Total Money, Standard, GlobalPlus and Fly Buys home loans will come into force from October 2.

Chris Bayliss, BNZ Director, retail, said: "Over the past year we've reduced our variable loan rates by 4.90% to ensure that we offer New Zealanders competitive rates which will enable them to reduce the principle on their loan at a quicker rate."

Earlier, politicians of various political parties slammed banks for not passing benefits of Official Cash Rate (OCR) cuts to the mortgage customers.