Kiwibank has announced a 100 basis point cut in its variable mortgage rate to 8.70%, following on from the Reserve Bank's 100 bps cut in the Official Cash Rate to 6.5%. But Kiwibank said it had cut its key 2 year fixed mortgage rate by only 20 basis points to 7.79% because it anticipated some of the cut last month by cutting the 2 year rate by 30 bps to 7.99%.

This means Kiwibank has essentially passed on just 50bps of the 100 bps cut in the OCR and since its rate peaked at 8.85% in early September it has passed on just 105 bps of the 150 bps of cuts in the OCR.

Here is the full statement below from Kiwibank.

Kiwibank has reacted immediately to the cut in the Official Cash Rate by the Reserve Bank Governor by making a matching one per cent cut to its variable home loan rate.

Kiwibank Chief Executive Sam Knowles said the new variable rate is 8.70% per annum with immediate effect for new customers and in two weeks for existing customers.

"We are also making cuts across the board to our fixed term rates," Mr Knowles said.

Kiwibank cut the premium two-year to below 8% late last month in anticipation of today's OCR reduction and has now passed on an additional small cut for this rate to 7.79%. The one year rate has also been cut to 7.99%.

Mr Knowles said the quick cuts were all part of the bank's strategy to be "slow to rise, but fast to fall" with home loan rates.