Cost of living: ASB lowers mortgage rates for third time in two weeks

Kiwis with mortgages have received more good news with major bank ASB slashing its home lending rates for the third time in two weeks.  

ASB made the announcement on Monday morning, with the bank confirming it had dropped its six-month term by 10 basis points from 7.39 percent to 7.29 percent.   

On top of this, ASB's one-year term has reduced by 5 basis points to 7.24 percent and the bank's two-year mortgage rate has also been slashed by six basis points to 6.79 percent.  

"With more than three-quarters of our fixed home lending customers currently opting for terms of 24 months or less, our rate reductions on these popular terms will appeal to New Zealand homeowners and prospective homeowners." ASB's executive general manager personal banking Adam Boyd said.   

But it's bad news for savers, with the bank dropping its 12-month term deposit rate to 6 percent and four term deposit rates at the longer terms by between 5 and 20 basis points.    

The changes come into effect on Monday morning and mean ASB now matches ANZ and BNZ for its one- and two-year rates.   

It comes after ASB slashed some of its lending rates last week and at the end of last month. 

Mortgage holders also received a brief reprieve at the end of last month when the Reserve Bank (RBNZ) held the Official Cash Rate at 5.5 percent - in line with what many economists predicted.  

The RBNZ said the New Zealand economy had evolved broadly and core inflation and most measures of inflation had declined. The bank said the risks to the inflation outlook were now more balanced.