ASB slashes 18-month mortgage rate to 'balance security with flexibility'

ASB has announced a major mortgage rate reduction despite the volatile economic environment.  

The 26 basis-point cut to its 18-month fixed loan rate made it the lowest such deal across New Zealand's major banks, ASB said.  

"This competitive 18-month rate will be good news for people looking to hedge their bets in the current economic environment," said Adam Boyd, ASB's personal banking general manager. "Whilst we don't know the direction of the OCR (official cash rate), wholesale rates remain elevated and the geo-political environment remains volatile."  

ASB's 18-month fixed loan rate was lowered to 6.89 percent from 7.15 percent previously, while the four and five-year rates were unchanged at 6.55 percent.  

Its move comes a day ahead of the Reserve Bank's (RBNZ) decision as to whether it would hike the OCR.  

The central bank said earlier this month inflation expectations remained concerningly high

At the same time, independent economist Cameron Bagrie didn't believe rate hikes were necessary.  

Still, the RBNZ would likely remain hawkish in its monetary policy statement on Wednesday, he said.