The nation's biggest lender is the first bank to pass on fixed rate cuts to borrowers. Its one year special will fall to a market low of 3.05%, a fall of 40 basis points.
The 3.05% one year rate is the lowest ever offered to borrowers by a major bank.
Its one year standard fixed rate drops to 3.55%, a cut of 30 basis points.
ANZ's two year rates fall by 30 basis points.
Its two year special falls to 3.35%, a drop of 30 basis points.
The rate is the fourth cheapest two year rate on the market, behind ICBC, China Construction Bank, and HSBC Premier.
ANZ's two year standard rate drops to 3.85%, down from 4.15%.
All of the new rates come into effect on March 19. Take a look at the latest rates in the market here.
While ANZ's rates are the cheapest bank rates, they do not represent record lows in NZ. Heartland's digital one year mortgage is just 2.89%, while KiwiSaver provider Simplicity offers 2.95% to customers.
Yet ANZ is the first mover on fixed rates after the Reserve Bank's unprecedented 75 basis point OCR cut.
The central bank's move took the OCR to 0.25% in the wake of the coronavirus pandemic, uncharted territory for NZ lenders.
Analysts believe lenders will only pass on minor rate cuts, due to their reliance on overseas funding, and downward pressure on term deposits. ANZ has cut its term deposit rates by 25 basis points.
Yet ANZ's move is likely to spark a new price war among its main competitors and domestic rivals.
The bank's retail managing director Ben Kelleher said: “While there are a range of factors in setting these rates, including the Reserve Bank of New Zealand’s emergency official cash rate drop of 0.75% this week, we’ve been mindful to balance the needs of borrowers and savers. For borrowers, every dollar counts, and lower interest rates will leave more in their pockets to help them through the disruption caused by Covid-19.
“At the same time, it’s important that bank deposits remain a viable option for savers who are looking for a low-risk investment with a reasonable rate of return.”