ASB has cut some of their mortgage rates, with their five year home loan rate dropping to 6.49 percent.

This puts it lower than their one year home loan rate, which is currently at 6.84 percent.

ASB economist Mark Smith says the key factor driving down their long-term interest rates is the expectation that inflation will stay high until 2025 and short term interest rates will need to be up for longer.

Mark Smith also says rents are expected to go up due to rising living costs across the board.

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