Watch: NZH Focus: Why banks won't cut mortgage rates

Reserve Bank rate cuts might not translate to lower mortgage payments for home owners if we take ANZ chief David Hisco at face value.

This week has been a frantic one for housing market news with the Reserve Bank imposing new lending regulations on Tuesday and then indicating yesterday that further cuts in the official cash rate were now likely.

But in between , in a highly unusual move, we've heard from Hisco on the risks of the housing boom.

He sent a clear signal that the retail banks are worried about lending risk. He welcomed the Reserve Bank restrictions and suggested they could have gone further.

He also warned that the banks were increasingly reliant on offshore funding to cover New Zealand growing mortgage debt and said that would push up the cost of borrowing.

That means, even if the Reserve Bank does cut the official rate to a record low of 2 per cent on August 11, banks rates may not fall.

That would be good news for the Reserve Bank and those trying to dampen the housing market - but not so great looking for more savings on mortgage payments