The lure of attractive fixed home loan rates

A number of banks have been vying to offer the sharpest two-year fixed mortgage rate over the last couple of weeks.

TSB Bank, Westpac, Kiwibank and HSBC have all tossed some very low rates into the market with SBS Bank currently offering the lowest with its 5.65% special - that's exactly the same as its floating rate.

Other banks' two-year rates aren't that far from their two-year rates: TSB's 5.88% two-year rate is only nine basis points above its 5.79% floating rate.

Craig Ebert at Bank of New Zealand says would-be borrowers can thank the Italian crisis for this because wholesale prices have been dropping steadily since July when the wider European crisis began worsening.