Mortgage wars: TSB drops rate to lowest on market

TSB Bank has announced the lowest fixed two-year 'special' rate in the mortgage market. Photo / NZME

TSB Bank has dropped its fixed two-year "special" home loan rate to the lowest on the market.

The bank introduced a rate of 4.29 per cent today, three days after SBS Bank and BNZ dropped their three-year "special" rates.

Special rates come with conditions including 20 per cent equity for the home loan.

TSB's two-year fixed rate is leading the market, followed by SBS Bank at 4.35 per cent and Westpac and BNZ at 4.39 per cent.

The drop in rates comes two days after Statistics New Zealand reported consumer price inflation fell by 0.5 per cent over the December quarter and rose by 0.1 per cent in the calendar year.

Market and Reserve Bank expectations were for a 0.2 per cent quarterly decline in the CPI.

Lowest fixed two-year rates:
TSB Bank: 4.29 per cent
SBS Bank: 4.35 per cent
Westpac: 4.39 per cent
BNZ: 4.39 per cent
Source: Interest.co.nz