Fixed home loan rates are now two percentage points lower than they were at the peak of the market, but the longest terms might not have much further to fall, ASB economists say.

They have released their latest home loan report ahead of the Reserve Bank's next official cash rate (OCR) review next week.

The OCR, which can influence bank interest rates, currently sits at 4.25 per cent but will be reviewed at 2pm on Wednesday, 19 February.

The ASB economic report notes interest markets were "volatile" and could change quickly, which could flow through to mortgage rates.

Despite the OCR review, the rates paid were not reliant solely on that rate, the ASB says.

"Fixed-term mortgages have been moving across many maturities since the Reserve Bank's November cut."

They said they expected "slight easing" in fixed rates up to one year in the first half of this year.

Beyond one-year fixes, they said there were likely to be some declines in one- and two-year terms, but longer-term rates could stay near their current levels or even increase.

"Significant falls for the longest fixes are unlikely and upward pressure is developing."

They said there was a trade-off for borrowers to weigh up between the cost of the mortgage rate, interest rate certainty from longer fixes, the flexibility of shorter terms and the potential for more rate cuts.

They said rates could end up falling more than expected if the Reserve Bank cut more than predicted, or if there was another threat to the economic outlook. But they could also hold up if inflation did not remain contained.

Mortgage adviser Jeremy Andrews, from Key Mortgages, said there had been more movement from banks this week, "which is great, though they are now having differing leading price points between 12, 18, 24, and 36 months.

There hadn't been as much movement on rates outside these timeframes.

"The two-year and one-year swap rates have fallen around 1.5 around 2 percent since mid 2024 and during this time bank interest rate margins have risen notably. I think the various rate drops now are showing they have room to move and negotiate harder.

"My recommendation to most borrowers with uncertain times in the geopolitical and economic future, is to hedge your bets on rates.

"If you're not planning on any future changes to lending or bank providers then refixing some of your mortgage for the at least mid terms will guarantee that some of your borrowing stays on these currently sharper rates for longer than the short terms most people have been choosing lately."

ASB's results released this week showed an increase in its net interest margin - the difference between what it paid for funding and what it charged borrowers.