Another major bank drops fixed-term home loan rates

Major banks are continuing to jockey for rate advantages following last week's OCR cut, with Westpac joining ASB and ANZ by cutting its two-year special rate to 4.99%.

ANZ was the first to cut its two-year fixed home loan rate special to 4.99% on the same day as the OCR cut last week.

Earlier today, ASB lowered its one-year mortgage rate by 24 basis points to 5.25%, its two-year rate by 30 basis points to 4.99% and its three-year rate to 5.35%.

"We are serious about giving our home loan customers and first home buyers interest rate relief, and that commitment should be evident in our consistent rate drops across January and February," said ASB's executive general manager Adam Boyd.

"Today’s fixed rate decreases will appeal to a broad range of Kiwi, with our sub-five per cent mortgage rate offering a strong medium-term option for people looking for added certainty."

It also cut some of its term deposit rates by between five and 25 basis points.

Westpac followed ANZ and ASB this afternoon, dropping its two-year advertised special rate to match, the first time it has been below 5% since April 2022. Several other fixed-term home loan rates were also cut by between 10 and 30 basis points.

Term deposit rates for 90-day to 3-year terms were also dropped between 10 and 30 basis points.

"We’re committed to helping homeowners reach their goals sooner, by delivering great rates and backing them up with personalised guidance and advice from our nationwide team of home loan experts," Westpac NZ managing director of consumer banking and wealth Helen Ryder said.

"While falling home loan rates continue to offer potential cost savings to homeowners, we know savings customers will be watching falling rates with interest."

All banks have cut rates in the wake of last week's 50 basis point cut to the official cash rate, which brought the OCR to 3.75%.

It's expected the OCR will fall further over the course of the year.