ANZ and its sister bank National Bank have cut their fixed mortgage rates by as much as 30 basis points after surprisingly weak inflation data for the December quarter led to a fall in wholesale interest rates and saw some economists push out their expectations of a Reserve Bank rate hike until late this year.

ANZ and National cut their six month mortgage rates by 10 basis points to 5.65 per cent.

They cut their one year mortgage rates by 9 basis points to 5.70 per cent and their 18 month mortgage rates by 10 basis points to 5.89 per cent.

Their two year mortgage rates were cut by 30 basis points to 5.79 per cent.

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However, they left their three, four and five year rates unchanged at 6.45 per cent, 6.85 per cent and 7.25 per cent respectively. They also left their floating mortgage rates unchanged at 5.74 per cent.

Wholesale 'swap' interest rates, which are often the basis for fixed mortgage rates, fell as much as 10 basis points after data was released showing the Consumer Price Index fell 0.3 per cent in the December quarter from the September quarter.

Economists and the Reserve Bank had expected inflation of 0.4 per cent for the quarter.

ANZ Economist Cameron Bagrie said the soft inflation data had removed the prospect of a Reserve Bank rate hike from the agenda. He even asked the question if a cut should now be expected.

"Today's softer than expected CPI is likely to encourage the RBNZ to remain on the sidelines for longer and will provide them with more scope to cut the OCR should the global outlook deteriorate further," Bagrie said.

"But the hurdle to such an outcome is high in our mind given the stickiness of some medium-term inflation drivers and the likelihood of a reversal in some of the Q4 price falls."

Floating mortgage rates are more closely linked to the Reserve Bank's Official Cash Rate.

- interest.co.nz

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