ASB Bank has announced a six-month fixed home loan rate of 4.75% - the lowest in the market by nearly 0.25 of a percentage point.
The move follows the Reserve Bank's announcement on Tuesday it was giving mortgage-lending banks six weeks' notice that from 1 October, no more than 10 percent of their new mortgages by value can be to people with deposits of less than 20%.
In a speech at Otago University, Governor Graeme Wheeler said he was concerned at the rate at which house prices were rising and the potential risks this posed to the financial system and the broader economy.
The lending restrictions will hit ASB hardest; its latest disclosure statement showed net new lending on mortgages was $852 million in the June quarter and that 73%, or $625 million, was to those with less than a 20% deposit.
In the March quarter, lending to people with less than a 20% deposit was 71% of the total.
Chief executive Barbara Chapman said last week the bank was cutting back on such lending.
The low rate announced today is available only to those with a deposit of at least 20 percent.
