HSBC has reduced its one and two-year fixed home loan rates to 4.95%. Last day, they made a cut to the official cash rate.

Though the rate has been dropped, there are some conditions as well. Borrowers need to be HSBC Premier customers. It means that they should be having at least combined home loan of $500,000 or $1000 in savings and investment with the bank.

People should be having a deposit of minimum 20 or 30% if it is the case of new investment lending in Auckland.

Earlier, the bank's one and two-year fixed rates were set at 5.20 and 5.30%. The bank also announced it has dropped its floating rate to 6.60% from 6.84%. It has also cut its revolving credit rate from 6.99% to 6.75%.

Not only HSBC, BNZ has also reduced its floating rate from 6.74% to 6.34%. Westpac has also reduced its floating mortgage rate to 6.40%. Last day, many banks have reduced their mortgage rates. ANZ, ASB, Kiwibank, and Co- operative Bank have dropped their floating mortgage rates.

Co-operative Bank chief executive Bruce McLachlan said, "We take our guidance on the direction of interest rates from the Reserve Bank and today they've given a strong signal that the immediate direction of interest rates is downwards".

ASB senior economist Chris Tennent-Brown said that more cut in the OCR can be expected. Governor Graeme Wheeler has lowered the official cash rate. The decline came at a time when markets were largely split on whether Brown would cut the rate.