For New Zealand borrowers, there is an emerging view that those who opt for floating or one-year terms in the hope that longer term rates will be much cheaper in a year's time may be disappointed.

One of the unknown factors is whether there will be a spring mortgage war between lenders here. With rates from all the major banks identical across all terms, the big lenders look to be determined to try to avoid another damaging price war. However, ANZ, National Bank and ASB have all reduced commission to mortgage brokers this week; whether the banks use the savings to fund price cuts, remains to be seen.

Non bank lender Sovereign, past of the ASB group, is moving in the opposite direction. It has postponed a decision on broker commissions but in the mean time has reduced some discounts. These include a reduction in the discount for larger loans from 0.15% to 0.10% for new business. For existing clients, the discount will be reduced when the borrower's current rate discount expires. The threshold for high value discounts rises from $200,000 to $275,000 for new business. Existing clients who have qualified for high value discounts will remain eligible. New advances for open-ended bridging advances will have an additional margin of 1% and a high value discount will not apply on the bridging portion during the bridging period.