A banking expert says today's OCR announcement is a significant one

The Reserve Bank has cut the OCR by 50-basis points, from 5.25 to 4.75-percent.

It says inflation's within its one-to-three percent target range and this cut will help maintain that.

Banks have quickly responded by lowering their home loan rates.

Co-operative Bank CEO Mark Wilkshire says a cut of this size can equal thousands of dollars back into people's pockets.

He says it's good news for borrowers as it's a big drop - the kind usually seen after an earthquake or a global financial crisis.