All the major banks have dropped their interest rates in the wake of the Reserve Bank's latest cut to the official cash rate (OCR).
The OCR dropped to a record-low 1.5 percent on Wednesday - bad news for savers, but music to the ears of homeowners still paying off their mortgages.
Assuming you're a homeowner, how much will the latest cuts save you? It depends on what bank you're with, what kind of mortgage you have and how much there is left to pay.
First-home buyer
According to the Reserve Bank's latest figures, the average loan taken out by a first-home buyer with a deposit under 20 percent is $441,576.
Assuming that's over 30 years, on ASB and BNZ's old floating rate of 5.8 percent would cost $1195 a fortnight. Over three decades, you'd pay $932,297 in total.
But after the OCR cut, both ASB and BNZ knocked their floating rates down to 5.7 percent. That would save you about $12 a fortnight, and over 30 years, almost $11,000.
Kiwibank's knocked its floating rate down 0.15 percent - from 5.8 percent to 5.65. If that stayed there for 30 years, customers would save $19 a fortnight and more than $15,000.
In every case you could save more in the long-term by paying off the mortgage quicker. Let's say you're a high-earner and could afford to pay it off in just 20 years. At the old floating rate of 5.8 percent, that'd cost you $1436 a fortnight and you'd pay $746,570 all-up.
But at Kiwibank's new rate of 5.65 percent, you'd save $18 a fortnight and $9055 over two decades.
Second or third home, or beyond
The average new mortgage is $215,777, according to KPMG. To pay that off over 20 years at 5.8 would cost $364,813 at $702 a fortnight.
Cutting that to 5.7 percent would save borrowers $6 a fortnight and $3000 overall; to 5.65 percent, they'd save $9 a fortnight and $4425 over two decades.
Let's say you're in the prime of your career and can knock the loan off in 10. In this case, you'd pay $284,602 in total on 5.8 percent and $282,690 on 5.65 percent - a saving of nearly $2000 thanks to the interest rate reduction, and potentially $80,000 by paying it off quicker.
Fixed rates
Fixed rates are usually lower than floating - a reward for sticking with one bank for a particular length of time.
Each of the banks has dropped their fixed rates too, but not as much as floating. Westpac's new one-year rate for example is 3.95 percent, down only 0.04 percent - but it cut the floating rate by 0.16 percent.
Savers will lose out from the cuts, with each of the banks cutting their interest rates for term deposits by as much, if not more, than they cut mortgage rates.
Newshub used the Sorted mortgage calculator to crunch the numbers.
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