Westpac has announced reduction in both its floating and six-month rates, further stimulating mortgage battle between rival banks in the country. The bank has declined its special variable rate to 5.69%, as compared to 6.49% earlier, beating rival ASB Bank's rates which had recently declined interest rates to 5.75%, the lowest rates in the market.

Westpac has dropped the standard variable home loan rate by 20 basic points to 6.29%, but rates are still slightly higher than the prevailing rates in the market. Besides, six-month fixed rates have also been revised to 5.29, declining interest rates by 10 basic points, to offer the lowest rates among New Zealand banks.

TSB and Australian owned bank offers 5.35% and 5.45% which are just lower than that of Westpac rates. Bruce McLachlan, General Manager of retail banking for Westpac, said: "These rate moves reflect our desire to offer extremely competitive home loan options along with leading service and value through our local banking network."

He said that customers would save $130 due to floating rate revision to 5.69%, while around $500 on accounts of change in a two-year rate of 9.25% to fix at 5.29% for six months.