ASB has followed the lead of ANZ and Kiwibank and slashed its fixed mortgage rates by as much as half a percentage point.

All of ASB's fixed rates for terms between one and five years are now set a 5.99 per cent.

Its five-year fixed rate was cut by 0.50 per cent, while the four-year rate fell by 0.40 per cent.

Read more:
Banks slashing mortgage rates
Banks in battle to cut rates

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ASB's three-year and one-year fixed rates fell by 0.30 per cent and 0.24 per cent, respectively.

Its six-month rate dropped 0.21 per cent to 5.59 per cent, while ASB also lowered its one-year fixed rate special by 0.24 per cent to 5.35 per cent.

A highly competitive home loan environment and favourable wholesale interest rates - what banks pay to access funding - are helping keep mortgage rates at some of the lowest levels New Zealand has seen.

Speculation has also been building that the Reserve Bank could cut the official cash rate, which is closely linked to mortgage rates, next month.

ANZ made big changes across its fixed rates at the weekend, including cutting its 4-year fixed rate by three-quarters of a percentage point from 6.49 per cent to 5.75 per cent.

ANZ's one-year and two-year fixed rates plunged from 5.99 per cent to 5.59 per cent, while its two-year special remained unchanged at 5.39 per cent.

Kiwibank followed on Monday, cutting three of its rates.

Its one-year standard rate fell to 5.39 per cent from 5.59 per cent and its five-year rate dropped from 5.79 per cent to 5.60 per cent.

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Asked whether Westpac would react to its competitors' changes, a spokeswoman said on Tuesday: "We're considering our options."

Westpac's standard one, two and three-year rates are set at 5.99 per cent.

Massey University banking expert David Tripe said this week that there was scope for mortgage rates to keep tracking lower.

"Lending rates haven't gone down far enough yet to reflect the reduction in bank funding costs," Tripe said.