4 December 2008
SBS reacts swiftly to OCR reduction
New Zealand’s newest bank SBS Bank has responded swiftly to today’s cut in the Official Cash Rate (OCR) by announcing a substantial 195 basis point drop of its floating home loan rates.
The drop brings SBS Bank’s floating mortgage rate to just 7.20 percent, which is a four-year-low.
SBS Bank chief executive Ross Smith said “we are committed to supporting our customers and today’s announcement will be welcome news for many of them.
“SBS Bank is able to pass on the full benefits of the OCR reduction and more because we are not affected by the increased cost of borrowing offshore, which has been a result of the global credit crunch. As a registered bank owned by our customers, we have always maintained that they are our primary focus and thus will remain so.
“The OCR, set by the Reserve Bank of New Zealand, is the key influence on home loan interest rate in New Zealand. Other conditions such as the global financial turmoil over the past year can also affect rates.
“In real terms, it means that householders on a floating rate with a 30-year, $300,000 loan will see about $315.00 carved off their monthly mortgage payments. Passing on the full reduction could potentially be a lifeline to some homeowners,” Mr Smith said.