The mortgage rate war is heating up ahead of a widely expected official cash rate cut on Thursday, with ASB matching the 4.35 per cent special one-year rate BNZ unveiled last week.

It is the lowest home loan rate New Zealand has seen since the 1960s.

Borrowers wanting to access ASB's 4.35 per cent special must have at least 20 per cent equity.

With the economic outlook darkening, a 25 basis point OCR cut, to 2.75 per cent, is expected from the Reserve Bank this week.

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Some economists are picking the OCR to fall as low as 2 per cent.

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BNZ slashes rates to record low - one-year fixed rate cut to 4.35 per cent

ASB announced a number of additional mortgage rate cuts today, including dropping its two and three-year special rates by 20 basis points to 4.69 per cent and 4.79 per cent, respectively.

Its four-year special and standard rates have fallen 30 basis points to 4.99 per cent and 5.25 per cent.

ASB's five-year special and standard rates have been cut to 5.09 per cent and 5.35 per cent, respectively.

So far, the other major banks are yet to match ASB and BNZ's 4.35 per cent special.

ANZ has its one-year special rate set at 4.69 per cent, while Westpac has a two-year special of 4.69 per cent.

Asked whether ANZ would also match the 4.35 per cent rate, a spokesman said: "We have nothing to announce right now, but are keeping our rates under constant review."

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And Westpac doesn't have any immediate plans to match the rate, according to a spokesman.

"We are open for business with competitive rates which we are constantly reviewing and encourage those interested in a mortgage to talk to one of our bankers," the Westpac spokesman said.

Massey University banking expert David Tripe said last week that mortgage rates could potentially fall below 4 per cent in the current cycle.

"If we see sub 4 per cent rates it will be because the economy has got somewhat grimmer," he said.