The National Australia Bank has cut its fixed interest rate for two-year terms to the lowest level in more than 20 years.

The bank cut its two-year fixed interest rate by 0.05 per cent to 4.84 per cent, joining its existing four-year rate as the lowest level in more than 20 years.

NAB has also slashed its three-year term by 0.07 per cent to 5.06 per cent and its five-year term by 1.10 per cent to 5.69 per cent.

The bank says it now has the lowest rates for one-, two-, three-, four- and five-year fixed home loans.

Personal banking group executive Gavin Slater said NAB was committed to remaining competitive.

“We have seen increased demand for fixed-rate home loans in the past 12 months, so we know many home owners are looking for certainty, whether they are investors or first-home buyers, and NAB is offering that through these market-leading fixed home loan rates,” he said.

The Reserve Bank of Australia will hold its monthly meeting to review of interest rates on Tuesday.