Wellington, April 9 NZPA - Kiwibank has eased its two-year mortgage rate down 10 basis points to 6.09 percent.

The new rate came into effect today and interest.co.nz reported it was the lowest two-year rate now offered by a bank.

It was also the first move by a bank to cut long-term rates after Reserve Bank Governor Alan Bollard warned last week that the rise in longer term interest rates was "unwarranted".

Borrowers need at least 20 percent equity in their properties to get the new rate.

Kiwibank also lowered its six-month rate by 20 basis points to 5.79 percent, bringing it in line with ANZ National and Westpac.