Mortgage interest rates have plumbed new depths and the SBS Bank heads the leaderboard of six banks, now offering rates below 5% covering three different term times.
New borrowers and those coming up to reset their mortgage terms will be in a better financial position, either by taking a rate cut and keeping the cash in hand or leaving repayments the same, and shortening the overall full term.
However, some new rates can also carry conditions, such as the SBS Bank rates which are only for new residential lending above $100,000.
The Reserve Bank earlier this month cut its interest driving official cash rate (OCR) by 25 basis points to 3.25%, with many banks and analysts now forecasting two further cuts this year.
The interest wars began in earnest after that cut as ASB, ANZ, Kiwibank and The Co-operative Bank began the round of reductions.
Still with no offerings below 5% are the ANZ, The Co-operative Bank band and TSB.
ASB chief economist Nick Tuffley said the Reserve Bank had signalled it intended to cut the OCR again and its 90-day interest rate projection was consistent with another 25 basis point reduction.
''We now expect this rate cut to come in July, rather than September as previously thought,'' Mr Tuffley said in a statement.
Key factors prompting the cut included the weaker dairy price outlook and larger degree of slack in the labour market.
''With another year of of low dairy cashflows looking likely, the dairy sector and the broader economy are now more exposed and vulnerable to the decline in income,'' Mr Tuffley said.
Westpac senior economist Michael Gordon said recent weak gross domestic product data ''sealed the deal'', for a July OCR cut, and he expected a third cut in September, taking the OCR to 2.75%''
An economy falling this far short of its potential growth raises the risk that inflation will continue to undershoot the 2% target, in the absence of easier monetary conditions,'' Mr Gordon said in a statement.
