ASB has responded to the RBNZ's Official Cash Rate decision by reducing interest rates for home lending.
ASB's standard variable rate mortgages will reduce by 10 basis points, taking the rate for borrowers from 5.65% p.a to 5.55% p.a.
This change is effective Wednesday August 17 for new customers, and Wednesday August 24 for existing customers.
At the same time, ASB has increased its headline 18-month term deposit rate by 45 basis points to 3.65%.
"While the circumstances of each RBNZ rate decision will vary, we have carefully considered the current environment in adjusting these rates," says Ian Park, ASB’s Executive General Manager for Retail and Business Banking.
"In relation to offshore borrowing, wholesale funding costs have been steadily increasing over the last six months, with one of the drivers being the global market volatility associated with concerns around slowing global economic growth, and international events such as Brexit. At the same time, domestic term deposit interest rates have not been falling in line with reductions in the OCR, which has continued to increase costs for banks.
"The changes we are announcing today will ensure we offer highly competitive investment products combined with reduced home loan rates which are now at their lowest ever level, all while holding appropriate capital reserves."