ASB, Westpac cut fixed mortgage rate to 4.49%, latest banks to drop after ANZ, BNZ ahead of OCR

ASB and Westpac have both followed ANZ and BNZ in cutting their fixed one-year mortgage rates to 4.49%. Photo / Alex Burton

Two more banks have cut their fixed home-loan rate ahead of next week’s expected Official Cash Rate announcement.

ASB and Westpac have both followed ANZ and BNZ in cutting their fixed one-year mortgage rates to 4.49%.

Sarah Hearn, a general manager at Westpac NZ, said the cuts, effective today, “mean our one-year advertised special home loan rate has fallen by 2.65% p.a. over the last 15 months”.

“It’s an extremely competitive market out there, and we continue to fight hard to win business and pass on lower interest rates to our customers.

“We’ve also made significant cuts to our longer-term rates, reducing our 5-year special to 4.99% p.a. Splitting between shorter and longer terms could be an attractive option for homeowners looking for greater certainty and some protection against potential future rate rises.”

The move sees the bank’s fixed one-year rate drop by 26 basis points (bps). Westpac’s fixed six-month rate has also been cut to 4.99% and its two-year fixed rate has dropped to 4.65%.

ASB also cut its one-year fixed rate by 26bps. Its six-month fixed rate is now 4.95% and its two-year fixed rate is 4.65%.

Adam Boyd, an executive general manager at ASB, said it would be welcome news “to the thousands of households looking to refix their mortgages or begin their journey towards home ownership this year”.

“Our 18-month and 1-year terms have moved to sub-4.50%, which will be welcome news to those looking for certainty in an economic landscape that continues to evolve.”

ANZ announced a new one-year fixed rate of 4.49%, also a drop of 26bps, on Wednesday. BNZ dropped its rate to the same point on Tuesday.

ANZ also cut its six-month fixed rate to 4.89% and its two-year fixed rate to 4.65%. BNZ’s advertised rates are 4.99% for its fixed six-month term, 4.49% for its fixed one-year term and 4.75% for its two-year term.

The Reserve Bank (RBNZ) will make its next Official Cash Rate (OCR) decision on October 8.

The OCR sits at 3%, having fallen from 5.25% in August last year.

The RBNZ shifted its outlook at its last meeting to recognise that economic recovery had stalled. Two more rate cuts are now expected by March next year.

Raphael Franks is an Auckland-based reporter who covers business, breaking news and local stories from Tāmaki Makaurau. He joined the Herald as a Te Rito cadet in 2022.

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