BNZ has backflipped on its recent mortgage rate hike by dropping its long-term mortgage rates. 

It comes after another big bank cut its home loan rates last week in the wake of the first Official Cash rate (OCR) announcement of the year. 

BNZ is cutting its three, four and five-year fixed home loan rates by 10-40 basis points (bps), effective today. 

The bank’s three-year fixed home loan rate drops by 10bps to 4.99%. 

Its four-year lending term is being cut by 36bps from 5.55% to 5.19%. 

The largest cut, a 40bps drop, will see the five-year fixed home loan rate fall from 5.69% to 5.29%. 

Less than a month ago, BNZ hiked the same five-year term by 40bps to 5.69%. 

At the same time, it raised its four-year offering by 26bps to 5.55%. 

The Herald has approached BNZ for comment. 

Last week, Westpac also made changes to its long-term fixed home loan rates. 

Its advertised three-year fixed special rate dropped by 16bps to 4.99%, while its four-year and five-year fixed special rates were reduced by 20bps to 5.19% and 5.29% respectively. 

After the decision by the Reserve Bank (RBNZ) last week to leave the OCR on hold at 2.25%, consultant Jim Reardon told the Herald that financial markets had over-reacted to the central bank’s commentary at the end of last year, and wholesale interest rates shot up. 

Reardon said he couldn’t see mortgage rates rising in the next few months. 

The RBNZ’s recent commentary was interpreted by financial markets as being slightly dovish. 

The Monetary Policy Committee said that, if the economy evolved as expected, “monetary policy is likely to remain accommodative for some time”.