The ASB bank has reduced its two-year fixed home loan rate and now claims the lowest unrestricted rate on the mortgage market.
It has cut the rate from 5.45% to 5.25%.
Meanwhile, the Australian Reserve Bank has cut interest rates to a three-year low to give the economy a boost.
The decision cuts the official cash rate across the Tasman from 3.5% to 3.25%.
The ABC reports that the announcement surprised most economists and that currency traders were also caught slightly off guard.