Kiwibank and BNZ are the latest banks to cut home loan rates, following ASB.
BNZ has cut its six-month and one-year terms by between 5 and 10 basis points.
They stand at 7.24% for six months, and 7.14% for one year.
Kiwibank is cutting its special six-month fixed rates by 10 basis points to 7.25% for the special rate and 8.25% for the standard rate.
The special one-year rate is falling by about a quarter of a percentage point to 6.99%, while the standard one-year rate has fallen to 7.99%.
Kiwibank is also reducing some term deposit rates by between 5 and 10 basis points. Its one-year rate for more than $10,000 is 5.90%, and under that is 5.80%.
Last week, ASB dropped several fixed home loan rates by up to 10 basis points.
It comes as industry leaders are picking inflation to fall back into the Reserve Bank’s target band in the coming year, with expectations that the central bank may cut interest rates by the end of this year.
A quarterly survey of a handful of forecasters and company heads — commissioned by the Reserve Bank — showed expectations were for inflation to slow from 3.22% to 2.73% in the next 12 months, the lowest pick since September 2021.
Despite its small number of respondents — just 37 — the Reserve Banks regarded the survey as a credible steer on opinion, when looking at inflation and interest rates.
Westpac senior economist Satish Ranchhod said the Reserve Bank would get a fillip from the survey that showed its policy was working, but inflation was stubborn as demonstrated in figures released on Monday.
“While today’s fall in inflation expectations will help to quell concerns about the persistence of domestic inflation, we still think that inflation will fall more gradually than the Reserve Bank has assumed.
“Consistent with that, we’re not forecasting rate cuts until early next year.”
The Reserve Bank was due to review the Official Cash Rate next week, with expectations it would be held at 5.5%.
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