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Kiwibank will offer a fixed interest rate of 2.99 percent on one-year mortgage loans.
It is the first time that the bank has lowered rates below 3 percent.
The offer will take effect from Monday 11.
“Clients with a fixed interest rate due in the next month are likely to move to a new interest rate 1 percent lower than their current rate,” said product general manager Nicole Pervan,
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“On an average-size loan, this will reduce payments on [between] $ 50 to $ 70, which will be a great help right now. Clients have the flexibility to pay off their loans faster or keep that money in their back pocket for a rainy day. “
While it’s the lowest rate available from a New Zealand major bank, it’s not the first time that New Zealand customers have access to rates below 3 percent.
HSBC currently offers a one-year or 18-month rate of 2.95 percent.
Interest rates are predicted to stay lower longer due to the Covid-19 outbreak.
The Reserve Bank promised to keep the Official Cash Rate at 0.25 percent for 12 months, although the Westpac economist predicted it could drop to -0.5 percent in November.
