BNZ’s campaign is heavily focused on its two-year fixed homeloan rate at 6.89% and uses the slogan: "We’ve cut out brokers to give you a great home loan deal."

The other four major banks’ published two-year fixed rates are between 7.3% and 7.4%.

"It’s stripping out major value. The margins we’re seeing now are some of the toughest we’ve seen," Hayr told the Plan New Zealand annual conference earlier this month.

It is a very long time since a major bank has so aggressively tried to undercut its competitors and the other banks are being forced to cut their profit margins too, he says.

"Will one lender gain an advantage? There’s a lot of noise in the market at the moment and people are taking positions and getting quite emotional about them."

Hayr invites mortgage brokers to consider what impact recent developments might have on their businesses.

They should expect a greater focus on cost control and efficiency as a result of the margin compression and lender will have less tolerance for "professional time-wasters."

He points to recent trends in Australia such as "refund home loans" where brokers pass their commissions back to the customer and non-bank lender RAMS recently introduced offer on which it has dispensed with upfront commissions and is only paying brokers a trail commission of 0.45%.

"In Australia, mortgage brokers will soon have to declare all commissions and kickbacks," Hayr says.

The mortgage broking industry in New Zealand has also become more visible since the float of Mike Pero Mortgages, he says.