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Another major bank has cut both its home loan and deposit rates in the wake of the Official Cash Rate drop last month.

Kiwibank’s six-month fixed home loan special and standard rates have been cut by 20 basis points to 5.29% and 6.19% respectively.

Its one-year fixed special and standard rates have fallen by 10 basis points, down to 4.89% and 5.79%.

Meanwhile its two-year fixed special and standard rates have fallen by just four basis points to 4.95% and 5.85% respectively, with the banks three-year special and standard rates falling by six basis points to 5.29% and 6.09%.

Kiwibank’s variable, revolving, four and five year fixed and special rates remained unchanged.

The bank also cut all of its term deposit rates by between five and 15 basis points.

All of Kiwibank’s changes are effective from today, June 9.

Last week, the ASB and ANZ also cut their rates. Both banks are offering 4.89% over 18 months - the lowest rate since April 2022.

The OCR was cut by 25bps to 3.25% on May 28 in a widely expected move by economists and financial markets.

The RBNZ also lowered its forecast rate track. It now projects an OCR of 2.85% by the end of the year, down from a 3.1% forecast in February.

That implies at least one more rate cut this year with mixed odds on a second.

Should you fix or float?

Cameron Marcroft, senior adviser and director at Loan Market, told the Herald it felt like we were nearing the bottom of the interest rate cycle.

“I wouldn’t float now, I would definitely fix,” he said.

“The rates are good at the moment. There’s no guarantee they’re going to go lower.”

Marcroft said when consumers are sitting on floating rates at higher interest, the advantage of waiting for lower fixed rates can be taken away.

Nathan Miglani, managing adviser at mortgage broker firm Squirrel, said he expected to see 4.99% for three years soon.

Miglani said whether homeowners fix for a short or long period depended on the size of their mortgage.

“If their mortgage is under $250k-$300k then maybe fixing for one year is actually not a bad option,” he said.

Those with mortgages over half a million dollars should split their loan, Miglani recommended.