SBS bank has dropped its ultra low 3.99 per cent one year fixed home loan rate pushing the cheapest rate borrowers can get back over 4 per cent.

The bank launched the cut-rate offer in November as part of a re-brand and push into Auckland and other parts of the country outside its Southland home base.

But its website now states its current one year special rate as 4.35 per cent.

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Karen Tatterson, a mortgage broker at Loan Market, said the rate was only ever going to be available for a limited time and she had been notified of the change.

"I don't think it was deliberately done over the holidays. I think they planned to do it for just six or eight weeks."

According to the lowest one year rate available is now through HSBC at 4.25 per cent.

Tatterson said she believed SBS had got a bit of traction from offering the special as not many other banks had been prepared to match it.

"In some cases they did, but others were not, which is always what happens."

Tatterson said while a few other banks had dropped special rates over the Christmas break she expected rates to stabilise around the low fours for the next six to 12 months.

There was some expectation before Christmas that banks would increase their longer fixed term home loans rates in response to the US Federal Reserve increasing its official cash rate for the first time in nine years on December 17 .

But Tatterson said there had been little reaction to that so far.


"I believe the banks are happy at that level, they are still making money so there's no need for them to increase rates.

I think we might just see a stabilisation.

Tatterson said there had been a massive rush to get loan approvals completed before Christmas but the holiday period had been typically quiet.

"I've had a couple of purchases already this year but it's been no different to what I would normally expect."