Big bank cuts home loan rates ahead of OCR

Tuesday, 27 May 2025

Lloyd Burr explains why there's always a difference between the Official Cash Rate (OCR) and the mortgage rates banks charge us.

One of the big banks has announced across-the-board cuts to its fixed-term and variable home loan rates, citing confidence in an anticipated Official Cash Rate (OCR) cut expected on Wednesday from the Reserve Bank.

BNZ said on Tuesday people were “looking beyond” short term rates, as the “interest rate environment evolves”.

BNZ has priced their new fixed home loan rates in a range from 4.89% through to 5.59% ahead of an “expected” OCR cut.

The lowest, 4.89%, was for 18 months, and was a reduction from 4.95% previously.

The new one year rate was 4.95% and the longest offering, five years, was set to 5.59%.

BNZ is dropping its home loan rates ahead of the latest OCR update from the Reserve Bank.

BNZ’s six month fixed term home loan rate was 5.35%. The bank’s variable home loan rate was now either 6.44% or 6.54%, depending on the specific type.

James Leydon, BNZ General Manager of Home Lending, said the early move allowed the benefits of a reduced rate to be shared immediately with mortgage holders.

The rate reductions apply to all fixed-term durations, giving borrowers more options as interest rate trends shift.

As of Tuesday morning ANZ’s lowest rate, 5.59%, are for one year, 18 months and 2 years.

“By cutting our fixed rates across all terms, we’re giving customers more choice and the ability to lock in a competitive rate for a longer period,” Leydon said.

ANZ

As of Tuesday morning, ANZ’s lowest rate was 5.59% for one year, 18 months and 2 years. Special interest rates at 4.99% were available for customers, but requires minimum 20% equity and an ANZ transaction account with salary direct credited.

The six month rate was 6.09%, or 5.49% under special interest rates.

The floating rate sits at 6.69% and the flexible rate is 6.80%.

ASB

Like ANZ, ASB’s lowest rates were for 12, 18 and 24 months, all sitting at 4.99%. The 6 month rate was 5.59%.

Westpac

Westpac’s lowest rates sit at 5.59% for one year, 18 months and 2 years. Like ANZ, special rates of 4.99% are available to people who have a minimum 20% equity, plus salary credit to a Westpac transaction account.

Floating interest sits at 6.74%, Choices Everyday Floating is 6.84%, and choices floating with offset is 6.74%.

Kiwibank

Kiwibank’s lowest rates are 5.89% for 1 or 2 years if you have less than 20% equity, or 4.99% if you have at least 20% equity.

The 6 month rate is 5.49%, with 20% equity, or 6.39% without.