Banks locked in mortgage price war

1.00pm

With most analysts predicting another rise in interest rates this week, high street banks are locked in a price war.

The focus is two-year fixed rates, which have dropped a quarter of a per cent in the last week.

Bank of New Zealand began discounting by promising the lowest two-year rate, but the ASB and then the ANZ and then the ASB again have retaliated, pushing the rate down further.

Now the BNZ is back in the game. General Manager Andrew Whitechurch said his bank's two-year deal is now 7.15 per cent.

Mr Whitechurch admits it is hurting, but promises the offer will stand until mid-December.

The bank says the falls are sustainable in the short term.

- Newstalk ZB