ANZ and National Bank have announced they are dropping their fixed-term mortgage rates ahead of the next Official Cash Rate (OCR) announcement.
In a statement released today, ANZ and National said their new two-year rate would be 7%, down 0.20%.
Three, four and five-year fixed rates will drop to 7.10%, a fall of between 0.10 and 0.89%.
The rates will be effective from tomorrow.
The next OCR announcement is scheduled for January 29.
It was last adjusted on December 4, when Reserve Bank Governor Alan Bollard slashed the OCR by 1.5 percentage points, taking it to 5%.
Most economists are predicting another significant cut at the end of the month.
BNZ economists said a cut of 75 basis points, taking the rate to 4.25%, was likely.
Following the bleak results of the New Zealand Institute of Economic Research's (NZIER) quarterly survey of business opinion results released yesterday the NZIER said there was a "huge scope" for the Reserve Bank to cut interest rates, probably between 50 and 100 basis points.
"But if they went beyond 100 points we wouldn't be too surprised about that," NZIER research economist Ryoko Ito said.
