One of the smallest banks, Co-operative, first to react to OCR cut
The Co-operative Bank has stolen a march on the major banks by being first to cut its floating mortgage rate. With special audio feature.
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See also: ANALYSIS: Why cut rates, why now?
UPDATED: RBNZ cuts OCR as cheap oil saps inflation expectations and Dollar plunges after unexpected OCR cut and RBNZ retains view of robust economy in face of rate cuts
One of the smallest home-lending banks proved itself swiftest of foot in reacting to the surprise cut in the official cash rate.
The Co-operative Bank cut its floating mortgage rate within three-quarters of an hour of Reserve Bank governor Graeme Wheeler announcing he was cutting the OCR to 2.25% from 2.5%.
Co-operative has passed on the full 25 basis point cut and its floating rate is now 5.45%, the lowest rate in the market.
The median floating rate in the market is currently 5.85% and the next lowest is non-bank lender Resimac’s 5.55%.
Co-operative’s chief executive, Bruce McLachlan, says his bank thought it important to pass the rate cut on to customers as fast as possible.
“As a co-operative, we’re owned by our customers – people from all over New Zealand – and our motivation is to help them get ahead financially,” Mr McLachlan says.
The new rate will be available on new floating rate mortgages from this Friday and to existing customers from Tuesday, March 29.
Co-operative Bank’s mortgage book stood at $1.62 billion at the end of December, giving it about a 0.8% share of the mortgage market, based on Reserve Bank figures.
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Jenny Ruth
Thu, 10 Mar 2016
Thu, 10 Mar 2016
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One of the smallest banks, Co-operative, first to react to OCR cut
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