Sign in Subscribe
Banks (Finance)

Interest Rates Lowered for Home Owners and Businesses in Cook Islands

Strategic Insights

— 1 min read

Cook Islands home owners and businesses are reaping the benefits of lower interest rates as all three banks in the island nation have reduced their rates from the start of this week. Westpac, ANZ, and the Bank of Cook Islands have lowered their interest rates on various products, including housing loans, personal loans, and business lending rates. According to the Cook Islands News, the rate reductions are aimed at making borrowing more accessible and affordable for the public.

Key Takeaways:

  • Westpac reduced its interest rates on various products by 0.25%, with the standard variable home loan rate decreasing from 10.50% to 10.25% and the business lending rate decreasing to 10.25% from 11% per annum.
  • ANZ reduced its interest rate on a standard variable home loan from 11% to 10.70% per annum and cut its business lending rate by the same margin to 10.50% per annum.
  • The Bank of Cook Islands reduced individual home and business loan interest rates by 0.25% from March 1, effective from March 6.
  • Westpac's Westpac manager Wayne Beckley stated that the bank factors in various risks including country risk, market risk, concentration risk, operator risk, and the cost of doing business when setting interest rates.
  • ANZ manager Phil Haynes stated that the bank borrows NZ$80 million from offshore wholesale markets and has seen huge fluctuations in the price of borrowings since the collapse of Lehman Brothers.
  • Haynes also stated that normality is returning to the market, but wholesale funding costs remain expensive and volatile.

Statistics:

  • Westpac's standard variable home loan rate decreased from 10.50% to 10.25% per annum.
  • ANZ's standard variable home loan rate decreased from 11% to 10.70% per annum.
  • The Bank of Cook Islands reduced interest rates on individual home and business loans by 0.25%.
  • The gap between the cash rate and money market wholesale rates is wider than the historical average and is not showing any signs of easing.
  • NZ$80 million is being borrowed by two major banks from offshore wholesale markets.

Sources:

  • Cook Islands News
  • ANZ manager Phil Haynes
  • Westpac manager Wayne Beckley
  • (Pacnews) March 6, 2009

Read more