The Government-owned bank cut its two-year rate from 5.75% to 5.55%. The bank is also offering a cash incentive of $2015 for all new home lending above $100,000 with a minimum 20% equity.
Mid-January was traditionally a time when the home loan market became active and competition increased between the banks, Kiwibank communications manager Bruce Thompson said.
Kiwibank offered a floating mortgage rate of 6.65% and fixed rates ranged from the new 5.5% through to a five-year rate of 6.49%.
Among the current standard fixed rates on offer yesterday, the best value for borrowers with a deposit of 20% or more probably lay in the two-year and three-year terms.
However, Westpac chief economist Dominick Stephens warned it was possible fixed rated mortgages would fall even further in the weeks ahead.
''Waiting a while before fixing might offer even better value.''
Four and five-year rates seemed high relative to where he thought shorter-term rates were going to go over the coming four or five years, although they did offer stability.
Floating mortgage rates usually worked out to be more expensive for borrowers than short-term fixed rates, such as the six-month rate.
However, floating rates might still be the preferred option for those who required flexibility in their repayments, he said.
