Major bank cuts fixed mortgage rates again

ASB has cut its fixed mortgage rates for a fifth time in 2025. Photo / 123RF

ASB has cut several of its home-lending rates today – the largest by 20 basis points (bps).

The bank said its six-month fixed rate would be trimmed 10bps from 5.89% to 5.79%, effective immediately.

Its four-year fixed term is dropping 20bps from 5.79% to 5.59% and its five-year fixed rate will fall 10bps to 5.69%.

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

ASB said it’s the bank’s fifth fixed-rate mortgage drop in 2025.

“We’ve been consistent in our ambition to support New Zealanders on their home-ownership journey with lower mortgage rates,” said Adam Boyd, ASB’s executive general manager personal banking.

“We’re seeing a growing number of customers splitting their mortgages across different terms to hedge their bets in the current climate, and we’re pleased to be able to offer a range of lending options to suit homeowners’ and homebuyers’ diverse needs.”

ASB now has the equal lowest interest rate for a six-month fixed term among the big banks along with BNZ.

Data released today by CoreLogic NZ, which looked at Reserve Bank figures, showed 90% of borrowers chose a floating or short-term fixed rate (six to 12 months) in January.

However, CoreLogic NZ chief property economist Kelvin Davidson said “rate wars” could see a shift in borrowing behaviour to longer-term rates.

“The fixation with short fixes might be about to come to an end.

“Wite rate wars recently emerging among lenders offering lower 2-3 year fixed rates, we could start to see a shift back towards them pretty shortly.”

The Reserve Bank (RBNZ) will make its next Official Cash Rate (OCR) decision on April 9.

The OCR is currently 3.75% with the RBNZ delivering 175bps in basis cuts since July last year.

The RBNZ’s latest OCR track implies a 25bps cut in both April and May to 3.25%.

Stats NZ will release Gross Domestic Product (GDP) figures for the December quarter at 10.45am today.