Photo: RNZ / Nate McKinnon
Borrowers are being told that if they want the best home loan interest rate available, they need to push for "under the table" discounts.
Since the Reserve Bank revealed a softer stance at its most recent official cash rate (OCR) review, many economists have brought forward their expectation for when a cut could happen, and wholesale markets have priced in cuts even earlier.
Westpac cut some of its shorter-term interest rates, taking its one-year special to 6.89 percent. Then ANZ also cut rates, taking its one-year rate to 6.85 percent.
But Glen McLeod, from Edge Mortgages, said that was only what he had already been able to access for clients recently, anyway.
"[They say] 'we've dropped our six-month from 7.25 percent to 7.05 percent' but we've already been getting 6.99 per cent or 6.85 percent. That one-year rate of 6.85 percent, we've been getting from ANZ for probably eight weeks and I can get better than that from them now, anyway."
Another adviser, Shayna King, director of Loan Market South in Christchurch, agreed. She said there were three types of home loan rates - standard rates, which apply to those who do not have the equity to access specials, the advertised special rates and the "under the table" rates which were usually lower than the special rates.
"So ANZ's 'special advertised rate' is 6.85 percent but their under-the-table actual discounted rate has just dropped today to 6.65 percent."
David Cunningham, chief executive at Squirrel, said the new carded rates were along the same lines as Squirrel brokers had been getting for the past couple of months.
He said the drops were in line with falling wholesale rates.
McLeod said banks were not fighting particularly hard for business at the moment.
Most still offer cashback for new lending, at about 0.9 percent of the value of the loan for new borrowing.
Cunningham said any sort of "mortgage war" where banks fought hard for new business, was unlikely until the housing market picked up. "That could be a 2025 story."