There could be room for rates to fall even more. (File photo) Photo: RNZ
Two more banks are cutting their one-year fixed home loan rate to 4.79 percent - and one economist says there might be more room for rates to fall.
ANZ and BNZ earlier this week cut their one-year special rates to that level, and they have now been joined by Kiwibank and Westpac.
Kiwibank also cut its two-year rate to 4.89 percent, the same as ANZ, and its six-month rate to 5.09 percent.
Infometrics chief forecaster Gareth Kiernan said markets had already priced in two more cuts to the official cash rate.
"So moves by the Reserve Bank along those lines are unlikely to have much effect on fixed mortgage rates.
Infometrics chief forecaster Gareth Kiernan. (File photo) Photo: RNZ / Rebekah Parsons-King
"Perhaps when the second cut is all but locked in, it could knock the one-year rate down by another five or 10 basis points - reflecting market certainty around the cut, as opposed to the high probability currently expected for the cut."
He said if the bank came out with a more "dovish" statement and a lower OCR track at next week's Monetary Policy Statement, pointing towards the possibility of the OCR going down to 2.5 percent this could be reflected in swap rates and fixed mortgage rates in coming weeks."
Kiwibank was also reducing its term deposit rates by between 10 and 15 basis points.
Westpac was cutting its term deposit rates between five-month and three-year terms.
At the interest rate peak, the average new one-year special rate was 7.3 percent.
On a $500,000 30-year mortgage, at that interest rate payments would have been $791 a week.
At 4.79 percent, they drop to $605 a week.
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