26 Jan 2012

OCR outlook prompts ASB to cut mortgage rates

6:19 pm on 26 January 2012

The ASB bank cut a range of fixed mortgage rates by between a tenth and a fifth of a percentage point on Thursday afternoon.

The cuts bring it closer into line with the other main banks for shorter terms and undercuts its rivals on some longer-term fixed mortgages.

In announcing the changes, the Auckland-based bank cites the interest rate outlook following the latest Official Cash Rate review by the Reserve Bank, on Thursday morning.

It kept the OCR at the record low rate of 2.5%, which has been in place since March.

Reserve Bank Governor Alan Bollard noted some improvement in the global financial markets but warned there is still a lot of uncertainty in the world economy.

Interest rates on local money markets, where banks borrow to fund their mortgage lending, barely moved after the OCR announcement.