Westpac has announced it is cutting its longer-term home loan rates – the first major bank in New Zealand to do so in the wake of Wednesday’s OCR decision.

The bank is cutting its three, four and five-year fixed home loan rates.

The new rates will take effect from Monday, February 23.

This comes after the new Reserve Bank Governor Anna Breman kept the Official Cash Rate (OCR) on hold at 2.25% earlier this week, in line with market expectations.

Reserve Bank Governor Anna Breman. Photo / Mark Mitchell

Westpac NZ said it is decreasing its advertised three-year fixed special rate by 0.16% to 4.99% per annum – the only sub-5% advertised rate on that term among the five biggest banks as of 2pm today.

Westpac’s advertised four-year and five-year fixed special rates will both reduce by 0.20%, to 5.19% per annum and 5.29% per annum, respectively.

Westpac NZ managing director of product, sustainability and marketing, Sarah Hearn, said the bank was always looking for options to offer customers.

“Fixed interest rates have been generally moving higher since late last year, and the Official Cash Rate is forecast to lift in the next year, so we want to give customers the opportunity to act now and lock in these attractive special rates across longer terms if that suits their circumstances,” Hearn said.

Last week, ASB raised some of its longer-term home loan rates while cutting its shortest offering.

ASB said on February 9 its six-month fixed home loan rate would drop 6 basis points (bps) to 4.59%.

Its one-year fixed interest rate increased 10bps from 4.49% to 4.59%.

ASB was also increasing its two-year fixed mortgage rate by 20bps to 4.95%.

Meanwhile, its three-year rate moved from 5.09% to 5.19%.