Kiwibank undercuts BNZ'S two-year fixed interest home loan rate

Kiwibank has dropped its two-year fixed interest rate on home loans to 7.5 per cent, undercutting the 7.6 per cent "Unbeatable" offer from the Bank of New Zealand.

Kiwibank chief executive Sam Knowles said there were no application fees and customers moving from other banks would be offered a free legal switching service.

Mr Knowles said there was no expiry date on the offer.

BNZ's Unbeatable home loan campaign is due to end at the end of the month. The campaign promises to bear two year fixed rates on offer by BNZ's four major rivals -- ANZ, National Bank, Westpac and ASB -- but Kiwibank is not mentioned.

BNZ restarted the campaign in February, after an earlier incarnation sparked a mortgage price war at the end of last year.

Mr Knowles said Kiwibank's current home loan porfolio was about $1.3 billion.

- NZPA