ASB joins the list of major banks who have dropped their one-year fixed mortgage interest rate to 4.79 percent. Photo: Unsplash/ Li Rezaei
All the main banks have now dropped their rates, ahead of an expected 25 basis point cut in the official cash rate next week.
ASB said on Friday it was joining Westpac, ANZ, BNZ and Kiwibank with a one-year rate of 4.79 percent.
It will drop its one-year and 18-month rates to 4.79 percent, its six-month rate to 5.12 percent and its two-year rate to 4.89 percent.
ASB's executive general manager of personal banking Adam Boyd said tens of thousands of customers were due to refix on to lower rates in 2025.
"By Christmas, around 90 percent of customers holding a fixed home loan are likely to be on a rate less than 6 percent."
ASB also reduced some term deposit rates by between 5 and 15 basis points.
Its economists are forecasting a 25bp cut to the OCR next week, to 3 percent.
They said the central bank was likely to maintain a bias toward more easing but would make this conditional on medium-term inflation looking as though it would remain in the target band.
There was extra uncertainty at play, they said.
But they said with few other catalysts that would kickstart a domestic economic recovery, it was likely that the OCR would drop below 3 percent by the end of the year.
ANZ economists agreed the big focus next week would be on the OCR forecast and hints about where it would go from here.
"The big quarterly data (CPI, GDP, unemployment) since the last OCR review in July have been much as the RBNZ expected (or stronger) but the timelier growth indicators have been very soft.
"We've also seen some mixed inflation data. All up, a ready reckoner approach justifies perhaps 10-15bp off the OCR track, with a trough of 2.7 percent to 2.75 percent implying one more 25bp cut.
"Like in May, we expect the RBNZ will publish a track that is non-committal about the timing of that.
"Our big-picture view is that we expect the RBNZ to pivot more dovish and ultimately cut the OCR to 2.5 percent as the soft high-frequency data increasingly shows up in the hard data.
"But next week is likely too soon for a lurch in that direction."
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
