Photo: RNZ
ANZ and Westpac have become the first banks to move interest rates after the Reserve Bank cut the official cash rate.
The OCR has dropped by 50bps to 2.5 percent.
ANZ, the country's biggest bank, said it would cut variable home loan rates by 40bps.
Westpac said it, too, would move its rates.
- What's going to happen to home loan rates? Listen to No Stupid Questions with Susan Edmunds
Its two-year special will drop from 4.65 percent to 4.49 percent, effective from Friday.
From Monday, floating rates would drop by 30 basis points and business variable rates by 50.
Westpac spokesperson Sarah Hearn said lower interest rates were increasingly flowing through to households' bottom lines.
"Our popular one-year advertised special home loan rate has fallen by 1.80 percent p.a. over the past 12 months," she said.
"As a result, a customer with a $300,000 mortgage on a 15-year term would now be spending approximately $285 less [per month] on repayments for a 1-year fixed rate term, compared to the same time last year.
"While there's still economic uncertainty out there, falling lending rates should continue to give homeowners and businesses greater confidence about the year ahead. We're here to help them grow by offering great products, services and digital functionality, as well as competitive rates."
ASB announced at around 6.30pm it was cutting its variable rates by 30bps.
Economists said the OCR cut should help to boost consumer confidence and keep interest rates low through 2026.
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
