A Kiwibank mortgage manager has been reined in after wrongly telling a customer it was pulling low deposit pre-approvals.

Finance Minister Bill English says ASB Bank has "let down" customers by cancelling home loan approvals as a result of new lending restrictions.

ASB Bank has cancelled all pre-approvals for home loans over the 80 per cent loan to value ratio with effect from October 4.

New Zealand gained a seasonally adjusted net 2,100 migrants last month, as fewer Kiwis cross the Tasman.

Banks have already started tightening up their lending criteria for customers seeking low-deposit mortgages, despite new regulations not kicking in until next month.

The New Zealand sharemarket rallied by more than 1 per cent yesterday after US Federal Reserve chairman Ben Bernanke said he would maintain the country's stimulus programme.

The economy grew faster than expected in the second three months of the year, as engineering and architecture expansion offset drought impacts.

A surprise decision from the Federal Reserve has pushed Wall St up to new highs.

There's been a big jump in the number of younger people trying to get mortgages ahead of new Reserve Bank low-deposit lending rules, says credit agency Veda.

The case for higher interest rates gained more weight today after subtle shifts in the Reserve Bank's language were interpreted as being more hawkish.