Interest rates are on the move again and this time, surprisingly, fixed-term mortgage rates are on the way down.
Bank bill yields have climbed this week as we are a week closer to the next expected tightening of monetary policy on July 29.
But swap rates have fallen to their lowest levels since the middle of last year in response to the markets continuing a process of scaling back expectations for when foreign monetary polices will tighten.
Also, global investors are shifting out of equities and into fixed-interest assets amid deepening growth worries.
Government-owned Kiwibank started the latest competition in the home loan market with ANZ Bank and National Bank moving quickly to match the latest cut.
Kiwibank cut its two-year rate to 6.99% a year from 7.30%. Within hours, ANZ said it was cutting its rate to 7% from 7.3% and National Bank cut its rate to 6.99%.
The ANZ three-year rate fell to 7.3% from 7.75%, the four-year rate fell to 7.6% from 8.19% and the five-year rate to 7.75% from 8.49%.
National Bank cut its three-year rate to 7.25%, its four-year rate to 7.55% and its five-year rate to 7.79%.
ANZ-National, New Zealand's largest bank, did not comment on the rate cuts.
Kiwibank chief executive Sam Knowles said its cut was to give certainty to customers concerned about rate volatility.
