ASB bank is the first bank to move on cutting its home loan and saving rates in the wake of the Reserve Bank's official cash rate cut.

The RBNZ slashed the cash rate by 50 basis points to 1 per cent today - a new record low for New Zealand's cash rate.

ASB has cut its floating rates and one fixed term rate. Its variable home loan interest rate will fall from 5.7 per cent to 5.2 per cent and its revolving credit Orbit home loan will drop from 5.75 to 5.3 per cent.

Those changes will come in from August 14 for new customers and August 21 for existing customers.

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It is more of a shaving for its fixed rate. It will slice just four basis points of its two year fixed term rate dropping it to 3.75 per cent making it the lowest two year fixed rate available at a major bank.

TSB bank will also match the rate as it is offering to price match any rates by the Australian-owned banks.

But ASB will also drop its on-call savings rate by five basis points.

Craig Sims, ASB executive general manager retail at the ASB, said it was limiting its cut on deposits to its on call savings accounts.

"This is about meeting the expectations of our customers and making a deliberate choice to put them first.

"We believe our new lower rates provide a fair and considered outcome for borrowers while also balancing the needs of our savings customers."

The banks are heavily reliant on deposit holders to help fund their loan books and have been cautious about cutting those rates.

Sims urged borrowers to make the most of the low interest rate environment.

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"Now is an ideal opportunity for customers to review their home loan. Customers should consider whether to adjust the ratio of fixed versus floating if they have split their mortgage or whether changing from monthly to fortnightly payments would save them money.

"This is also an opportunity for customers to make extra payments or increase their regular payments while interest rates are low."