ANZ and its sister bank National have cut the rate on their 1 one year mortgage by 5 basis points to 5.65%, bringing it into line with their 6 month rate of 5.65%, which is unchanged.

This rate is slightly below their variable rates of 5.74%.

ANZ and National cut their 3 year, 4 year and 5 year mortgage rates by 35 basis points each to 6.1%, 6.5% and 6.9% respectively.

They left their 18 month and 2 year rates unchanged.

See all bank mortgage rates here.

The changes bring ANZ and National's fixed mortgage rates into line with Kiwibank on 5.65% and is above the market-leading one year mortgage rate of 5.49% from TSB. ANZ and National's longer term rates are also in line with Kiwibank, ASB and BNZ, while being below Westpac's.

See our earlier article on TSB's move.

However, ANZ and National's 1 year rate is below ASB on 5.7% and BNZ on 5.75%, but is above Westpac's 5.59% rate.

Most floating mortgage rates are around 5.65-5.75%, putting them in line with the lowest fixed rates ranging from 6 months to 2 years of around 5.65% to 5.8%.

More borrowers are now floating rather than fixing, given economist expectations the Reserve Bank will hold the Official Cash Rate, which is the basis for all New Zealand interest rates, unchanged at a record low of 2.5% until late this year, with some economists pointing to the prospect of rates being on hold well into 2013.

Some think there is even a possibility of a cut in the OCR if the European crisis worsens substantially and hits global growth and inflation outlooks.

Rates on hold at low levels for longer, with the possibility of further rate cuts, are seen making floating rates at least as attractive as fixed rates. More than 60% of New Zealand borrowers are now floating with more than 80% either floating or set to come of a fixed rate within a year. See more here in Gareth Vaughan's article.

See our interactive chart below of average bank mortgage rates showing a fall of around 35 basis points in recent months as the economic outlook has darkened globally and the earthquake rebuild in Christchurch has been delayed.