ASB has joined the rate-cutting fray by dropping some of its mortgage rates today.

The bank’s 18-month fixed home loan rate drops 10 basis points (bps) to 4.89%, drawing level with rival ANZ.

Yesterday, ANZ cut its 18-month term to 4.89%, the lowest it’s been since April 2022.

ASB said its six-month fixed-term rate would be cut by 14bps to 5.45%. Its one-year offering is decreasing 4bps to 4.95%.

The largest decrease is to its three-year fixed-term rate, which falls 20bps to 5.15%.

ASB said today was the bank’s seventh fixed mortgage rate drop of 2025.

“Interest rates remain a hot topic of conversation, with homeowners and first home buyers watching the market closely,” said ASB’s executive general manager personal banking Adam Boyd.

“Whether you’re looking to fix or float, today’s drops to our fixed lending rates across short and medium terms, along with our lower variable rates announced last week, give New Zealanders a range of appealing options to consider.”

ASB also lowered some of its term deposit rates by between 5-20bps.

Yesterday, ANZ cut all its special and standard fixed home loan rates.

The largest cuts were to its six-month special and standard terms, which fell 20bps to 5.29% and 5.89%, respectively.

ANZ also cut 20bps off its standard four- and five-year home loan rates, and its special three-year term.

Its one-year special term dropped 4bps to 4.95%.

The latest mortgage rate moves come as banks respond to last week’s Official Cash Rate (OCR), which saw it drop a further 25bps to 3.25%.

The Reserve Bank (RBNZ) also lowered its forecast rate track. It now projects an OCR of 2.85% by the end of the year, down from a 3.1% forecast in February.

That implies at least one more rate cut this year with mixed odds on a second.

ASB chief economist Nick Tuffley said he expected two more cuts to the OCR, which would take it to 2.75%.

“It is possible the RBNZ pauses along the way. Our forecast of July and August cuts doesn’t reflect that, but unfolding events can easily change the timing,” Tuffley said.