Kiwibank has made a move to increase its share of the home loan market by cutting some of its rates as three major retail banks increased their fixed home loan rates.
The state-owned bank shaved six basis points (0.06 percent) from its two year fixed rate to 2.49 percent.
The move came after ANZ, BNZ, and Westpac joined ASB in raising their fixed rates between 0.1 and nearly 0.5 percentage points.
Kiwibank chief executive Steve Jurkovic said the aim was to provide an alternative to the large Australian owned banks.
"In a time of uncertainty, we wanted to provide Kiwi an opportunity to pay back their loans faster, save, or buy local and support our economy."
The market average for the most popular loans - one and two-year fixed - are now 2.5 and 2.95 percent respectively.
However, Kiwibank raised some other fixed rates, which it did not initially highlight, and also upped its floating mortgage rate by 0.35 percentage points to 3.75 percent.
The other main banks have not altered their floating rates, which would more likely be done when the Reserve Bank raises the official cash rate.
Wholesale interest rates have been rising in recent weeks, and the RBNZ is now expected to start raising its cash rate as soon as next month.
The banks have also raised some of their term deposit rates.