ASB has joined the rate cut fray, dropping all of its fixed home lending terms - but there's a warning that any rate relief will take time to filter through to households.

ASB says its move made it the first major bank to have all its fixed mortgage rates at under 7 percent, since June last year.

The six-month rate drops 25 basis points from 7.14 percent to 6.99 percent, while the one-year fixed rate drops 29 basis points from 7.14 percent to 6.85 percent.

ASB's 18-month rate drops 20 basis points to 6.69 percent, while its two-year rate drops 26 basis points to 6.49 percent. ASB has also made slight reductions to its three- and four-year terms, while its five-year rate drops 40 basis points to 5.99 percent.

For a borrower with a $500,000 mortgage over 30 years, the drop in the one-year rate is worth about $20 a week.

ASB's executive general manager personal banking Adam Boyd says the decision was prompted by falling wholesale rates.

"It's been a challenging period for many New Zealanders, and we're pleased to be able to provide some relief in the form of lower home loan rates."

It follows Westpac, which was the first to move after the Reserve Bank changed its tone in its latest official cash rate update, ANZ, BNZ and Kiwibank.

But while the rate drops may boost morale for borrowers struggling on higher interest rates, it could be some time before they flow through to real relief.

Reserve Bank data shows that, of $263.529 billion in owner-occupier home loans, $50.3b will refix in between three to six months, $70b in six months to a year and $52b in between one and two years.

Kiwibank chief economist Jarrod Kerr says a recent trend for shorter fixes means that the impact of home loan cuts would be felt more quickly than it might have been in the past but it's still not an immediate impact.

"The Reserve Bank's out there saying historically it's an 18-month sort of thing [for rate cuts to be felt] ...but what we've seen is many customers fixing for six months or a year. That has shortened it up a bit. But most people are on some sort of fixed rate. There's only 10 percent of mortgages on floating."

He says falling interest rates will have a psychological impact on borrowers, even if they can't take advantage of them yet.

"Just knowing interest rates are falling is also quite important."

-RNZ.