TSB is set to become the fourth bank in New Zealand to join the sub-4 per cent mortgage war.

From today TSB is offering to match any nationally advertised one-year home lending rate offered by an Australian-owned bank until Sunday 3 March.

Last month Australian-owned Westpac offered a one-year fixed term rate of 3.99 per cent – down 16 basis points on its standard rate of 4.15 per cent. Kiwibank and HSBC also have lowered their rates recently.

Westpac's special, however, is only available to those with equity of at least 20 per cent.

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Donna Cooper, TSB chief executive, said its offer was a bold and unique move in the New Zealand banking industry.

"We believe it is an important move."

Cooper said more than $5 billion in combined profit was sent overseas by Australian-owned banks last year.

"That's equal to almost 2 per cent of New Zealand's entire GDP.

"If that money stays in New Zealand, it can continue to move through our local economy and boost regional growth."

Justine St John, TSB general manager marketing and customer experience, said as the spotlight on overseas ownerships of banks increases, TSB was proactively encouraging New Zealanders to consider their banking options.

John Bolton, managing director of Squirrel Mortgages, said wholesale rates had fallen recently which had taken the pressure off bank margins after rises last year.

"Wholesale rates have come back a bit."

Karen Tatterson, a mortgage broker with Loan Market, said anyone due to re-fix their mortgage in the next 60 days should try and lock in an offer and those who were due to end their fix term in the next six to nine months should also weigh up the cost of breaking their mortgage to re-fix it at a lower rate.

Bolton said it was always worth negotiating to see if other banks they would match the rates.

"You will find that by and large they match each other."