Kiwibank is cutting its two-year fixed home loan rate to 6.99 percent per annum from 7.30 percent.
Kiwibank chief executive Sam Knowles said the rate cut was to give some certainty to customers who are concerned about interest rate volatility.
Kiwibank has also introduced a 12-month cap option on its variable rate, which for a $250 fee ensures the rate does not increase above 6.50 percent per annum for 12 months. The current variable rate is 5.9 percent.
Economists are generally forecasting that interest rates will rise as the Reserve Bank of New Zealand shifts monetary policy to a more normal setting as the global economy recovers.
