Key Points:

The last hold-out among the big retail banks - ANZ National, has joined the team and cut its mortgage rates on the back of yesterday's Reserve Bank' shock .50 per cent cut in the Official Cash Rate.

All the main banks cut their rates yesterday, but the ANZ National has only now moved its rates.

Its floating rate will come down 50 points from 10.95 per cent to 10.45 per cent, effective Monday, September 15 for new customers and October 10 for existing.

This is for people with mortgages at either the ANZ or National Bank.

The 2 year fixed rate for both banks has come down 0.25 per cent to 8.7 per cent.

Kiwibank was the first to cut its floating rate to 9.7 per cent immediately after the Reserve Bank move and had said this week it was still making money when the floating rate was 10.2 per cent before today's central bank move. BNZ and Westpac cut their floating rate to 10.45 per cent today.

Kiwibank cut its two-year fixed rate by 36 basis points to 8.49 per cent. ASB cut its two-year rate to 8.90 per cent from 8.95 per cent. BNZ's new two-year classic rate of 8.79 per cent compares with 8.99 per cent earlier this week on the interest.co.nz website.

The Reserve Bank's move to cut its official cash rate by more than expected was seen as an attempt to push the banks along and address a lag in the impact of policy.

In cutting the official cash rate by 50 basis points to 7.5 per cent, Reserve Bank governor Alan Bollard said he was giving mortgage lenders "a bit of room" by front loading the current easing cycling.

Even with declines in mortgage rates over recent months, the average mortgage rate households are paying will continue to rise because fixed rare mortgages are the norm.

Analysts point to the mortgage war led by BNZ two years ago and the two-year rate fell to around 7.95 per cent. Anyone with a two-year fixed mortgage about to mature still faces higher mortgage costs.

But two-year fixed mortgage rates were nudging around 9 per cent before the central bank started its easing cycle in July.

- NZPA / Herald Online