ASB cuts mortgage rates and matches rivals, investment rates fall

ASB has cut some of its most popular home loan terms as it matches rival banks who made similar moves this week.

The bank said about 90% of its customers on fixed loans are likely to be on a rate less than 6% by Christmas.

From today, ASB’s one-year fixed mortgage rate will drop from 4.89% to 4.79%.

ASB, ANZ, Kiwibank, Westpac and BNZ are all offering one-year fixed terms at 4.79%.

ASB is cutting its two-year fixed home loan rate by 10 basis points (bps) to 4.89% - in line with three other major banks.

Its six-month fixed rate will drop 17bps to 5.12%.

“We’ve got tens of thousands of customers due to refix onto lower rates in 2025, and we know any rate reduction is going to help these households, with savings they can put towards other important things,” said ASB’s executive general manager personal banking Adam Boyd.

ASB said it was also reducing some term deposit rates by between 5-15bps.

Mortgage wars in full swing

All major banks have lowered their lending rates this week ahead of the Reserve Bank’s (RBNZ) next Official Cash Rate (OCR) decision on Wednesday.

The RBNZ is widely expected to cut the cash rate by 25 bps from 3.25% to 3%.

ANZ kicked off the rate cutting on Monday, bringing its one-year rate down to the lowest since June 2022.

BNZ cut its rates on Wednesday, including an equal low 5.09% for its six-month offering.

Yesterday, Kiwibank and Westpac both cut some of their key lending options. Westpac lowered its 18-month fixed rate by 16bps to 4.79%.

Westpac chief economist Kelly Eckhold said the pass-through of OCR cuts into household budgets had so far been slow, but more Kiwis would start feeling those benefits.

“Mortgaged households have felt just half of the expected final impact of the RBNZ’s policy easing,” Eckhold said.

“Around 50% of all mortgages will refinance over the next six months… this should provide a boost to household spending.”