Following the dramatic new rate offer of 3.87% by HSBC for an 18 month fixed home loan term, ASB has responded targeting a low one year rate.

ASB has announced a new carded 'special' rate of 4.39% for 12 months fixed.

That is a reduction of -6 bps in what is becoming a very competitive mortgage market.

They won't be the last to announce lower rates.

Already we have had reductions announced by SBS Bank and BNZ.

ASB's new 4.39% one year offer is now the lowest of any bank for that term except from HSBC who have a 4.19% offer for their HSBC Premier customers.

This offer is now -16 bps lower than the rate offered by the largest home loan lender, ANZ. ASB is the country's second largest home loan lender, so it is unlikely that ANZ won't respond in some way.

Not all banks are responding with sharper rates. For example, Kiwibank is offering a free holiday in Samoa with every loan of $200,000 or more applied for by November 26 and drawn down by January 18, 2018. That includes return flights for two adults to Apia, flying economy with Air New Zealand on a Seat + Bag ticket, five nights in an Ocean View Room at Taumeasina Island Resort, with daily buffet breakfast for two, return airport transfers in Samoa for two adults, complimentary use of snorkel gear, kayaks and catamarans, and 1 GB of WIFI per day for two adults.

The Spring house selling season may be a challenge for both real estate agents and bankers this year because the suggestion is that transaction volumes will be relatively low. Winning market share off rivals may be the only way business plan budgets can be achieved.

These changes come as wholesale swap rates start to rise again. More rises in these base rates are expected today following Wall Street's moves at the end of last week.

See all banks' carded, or advertised, home loan interest rates here.

Here is the full snapshot of the fixed-term rates on offer from the key retail banks.

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

And TSB still has a ten year fixed rate of 6.20%.