The bank is cutting its 6-month, 1-year and 18-month rates by 20 basis points each, with the 1-year term at a market leading rate of 5.59 percent.

It came after Westpac cut its 6-month rate on Thursday to 5.99 percent, with both banks matching the BNZ's move from late last year - which came after the Reserve Bank's 50 basis point official cash

rate (OCR) cut in November.

"We want to help customers looking to refix, or Kiwi looking to buy, get off to a strong start in 2025. Today's rate changes reflect the recent fall in short-term wholesale rates," ASB general manager

product, Emma-Jayne Liddy said.

"With more than two-thirds of our mortgage customers opting for a term of 18-months or less, we expect these changes to be popular."

Financial markets forecast the Reserve Bank to cut the OCR by a further 50 basis points next month, from the current rate of 4.25 percent.