ASB has lowered its fixed mortgage rates, bringing them in line with other major banks.

The bank today announced cuts of between 10 and 20 basis points (bps) to its six-month to three-year lending terms.

ASB’s one-year fixed-term home loan rate will drop 20bps from 5.99% to 5.79%.

Its six-month and two-year fixed rates also fall 20bps, to 6.19% and 5.49% respectively.

The bank’s three-year fixed home loan rate is being cut by 10bps to 5.59%.

Last week, ASB cut its variable home loan rate by 50bps to 7.39% and its orbit rate to 7.49%, following the Reserve Bank’s decision to cut the Official Cash Rate (OCR) by 50bps to 4.25%.

ASB also reduced some of its term deposit rates by between 10 and 20bps.

While falling interest rates this year have been good news for some borrowers, they haven’t dropped as much as many optimists would have hoped.

Reserve Bank governor Adrian Orr tempered expectations around mortgage cuts last week, noting “other global influences going on” as a reason for interest rates not necessarily falling in line with the OCR.

Other factors, such as banks already pricing in OCR cuts, should calm overly enthused borrowers.

In reality, OCR changes have never translated one-for-one to mortgage rate changes across all terms, with the OCR more directly influencing floating rates and those for loans fixed at shorter terms.

Many of the major banks were quick to pass on the full 50bps to customers on floating rates last Wednesday.

The OCR also isn’t the only thing that influences the interest rates that consumers and businesses pay.

Geopolitical factors can put upward pressure on the interest rates banks pay to borrow money from international money markets to then on-lend to Kiwis.

Lately, this pressure has revolved around Donald Trump following his win in the US presidential election in November.

Investors believe the tax cuts the President-elect has promised to deliver in the US will result in the country’s books sinking further into the red.