The bank shaved 10 to 15 basis points off its 18-month, two-year, four-year, five-year and seven year fixed terms.

None of the resulting rates were market-leading.

At the same time, BNZ hiked its two- and three-year 'specials', sweeter deals which come with various strings attached.

Multinational bank HSBC and New Zealand's member-owned The Co-operative Bank lead the market across almost every rate category.

Last month HSBC launched a record low 3.95 per cent rate, which it claimed was the lowest in New Zealand for over 50 years.

Southland's SBS was the first bank to go below the 4 per cent mark, with a 3.99 per cent offer in November last year.

Both banks claimed the deals would be profitable, and were not marketing stunts.

Mortgage rates are closely linked to wholesale interest rates, which have fallen 30 to 60 basis points in the last two months.

They are also influenced by the Reserve Bank's official cash rate, which remains at a record low of 2.5 per cent.

Some economists expect further cuts this year, with both inflation expectations and the consumer price index at a historic low.

HOTTEST BANK MORTGAGE RATES

Floating: 5.6 per cent - ICBC

Six month: 4.69 per cent - ICBC
Six month "special": 4.85 per cent - ASB, HSBC Premier

One year: 4.39 per cent - The Co-operative Bank
One year "special": 4.25 per cent - HSBC Premier

Eighteen month: 4.39 per cent - The Co-operative Bank
Eighteen month "special": 3.95 per cent - HSBC Premier

Two year: 4.49 per cent - The Co-operative Bank
Two year "special": 4.25 per cent- HSBC

Three year: 4.75 per cent - The Co-operative Bank
Three year "special": 4.59 per cent- HSBC Premier

Four year: 4.99 per cent - The Co-operative Bank
Four year "special": 4.79 per cent - HSBC Premier

Five year: 5.15 per cent - The Co-operative Bank
Five year "special": 4.99 per cent - HSBC Premier