Wellington, Feb 19 NZPA - Kiwibank has cut half a percent off its variable home loan rate, bringing it down to an historic low of 5.99 percent.

Chief executive Sam Knowles described the present interest rate market as "extraordinary", with the bank's variable rate falling from a high of 10.20 percent to 5.99 percent in five months. "There are strong indications that there will be a further cut in the official cash rate next month, so we are cutting our variable rate in anticipation of this."

Westpac also moved today to cut its variable rate to 6.49 percent from 6.89 percent.

Westpac is also cutting its six-month fixed mortgage rate to 5.79 percent from 5.99 percent.

"The market is starting to price in further downward official cash rate moves by the Reserve Bank," said Westpac New Zealand acting chief executive Bruce McLachlan.

"Many uncertainties remain, but we want to be proactive, particularly as many of our home loan customers are looking closely at short term rates in the current environment," he said.

NZPA WGT pjg kn