ASB price leader in NZ mortgage market 05 August 2010 4:35PM Sophia Rodrigues Nearly a week after the Reserve Bank of New Zealand announced a cash rate hike of 25 basis points, ASB Bank became the first bank to follow up with a corresponding increase in its floating mortgage rate to 6.25 per cent.The bank also hiked its six-month fixed home loan rate by 25 basis points to 6.45 per cent. At the same time, ASB reduced interest rates on fixed home loans for terms of two years and above by around 10 basis points. The decline is a reflection of the outlook provided by the RBNZ with the cash rate decision, in which it said the pace of further increases in the cash rate will be more moderate than was projected in the June monetary policy statement. ASB's move was the culmination of a stand-off that lasted a few days about which bank would announce the first rate hike and by how much. Banks seem generally hesitant to move first because the weak housing market means the mortgage market has been more competitive, and borrowers are now more sensitive to interest rate differences.The largest bank, ANZ, has a variable mortgage rate of 5.95 per cent, and it will be interesting to see if the bank raises the rate by a full 25 basis points.