Westpac is cutting the majority of its home loan rates – including offering the first sub 5% rate among the major banks.

The bank’s special three-year fixed home loan rate will drop 60 basis points (bps) to 4.99%, effective tomorrow.

The same cut will apply to its standard three-year offering, which will drop to 5.59%.

Westpac’s one-year home loan rates will drop 5bps to 5.54% (special) and 6.14% (standard).

Its 18-month, two- and four-year terms will also drop by between 5-10bps.

No changes were made to its six-month home loan rates, which were trimmed by 20bps three weeks ago.

The bank is lowering its term deposit rates from five months to one year by between 5-10bps.

Sarah Hearn, Westpac NZ general manager of product, sustainability and marketing, said it was the first time the bank had an advertised home loan rate in the 4s since August 2022.

“We know that customers take different approaches – some watch the market closely and fix for short periods, while others want certainty over a longer period,” Hearn said.

Kiwibank also cut its mid-term home loan rates today.

Its two-year fixed special rate will drop from 5.45% to 5.29%, while its standard fixed rate for the same period falls from 6.35% to 6.19%.

The bank’s three-year fixed rates will be cut by 10bps to 5.59% (special) and 6.39% (standard).

On Monday, ASB announced cuts of 5bps to its one-year and 18-month terms.

The bank’s one-year fixed home loan rate fell to 5.54%.

ASB also trimmed 20bps off its two-year fixed rate, bringing it to 5.29%.

The Reserve Bank (RBNZ) is widely expected to cut the Official Cash Rate (OCR) again when it next meets on February 19.

The RBNZ indicated at its last meeting in November – when it cut the OCR by 50bps to 4.25% – that another 50bps cut was coming in February.

In its Monetary Policy Statement, the RBNZ set out a forward track that sees the OCR dropping to about 3% by the middle of 2025.