And then there were two: Two of the major banks are now offering under 6% for three years as anticipation of future OCR cuts drives increased competition in longer-term fixed mortgages

The BNZ has taken up the challenge posed by Westpac two weeks ago, matching Westpac's 5.99% fixed, three-year mortgage rate.

It means those two banks are sitting comfortably below other big banks with their three-year 'special' offerings and it will be interesting to see, first if they get much traction and second, how long it may be before the likes of the ANZ (currently with a rate 60 basis-points higher) and ASB (50 bps higher) decide to come down and join them.

See all the rates here.

The three-year term is not generally that popular with home owners, with one and two year terms attracting much more custom. Reserve Bank (RBNZ) figures as of February (latest available) show for example that only about $8.7 billion worth of the $310.4 billion of mortgages on fixed rates in New Zealand are for three year terms.

BNZ has made changes right through its offering, effective as of Thursday, but the three-year rate is the stand out.

Otherwise it has followed the pattern seen recently from other banks of increasing rates on more near-dated fixed terms, while reducing longer terms. The banks are betting on future cuts to the Official Cash Rate (OCR). Indeed wholesale market pricing is already suggesting cuts to the OCR in the second half of this year - though that's a very different reading to what the RBNZ is portraying.

As an example of the two-tier fixed structure that's forming, BNZ's six-month rate has been raised 30 bps to 6.84%, the one-year up 20 bps to 6.74% and the two-year up just 4 bps to 6.49% - which is 10 bps lower than the four other biggest banks. BNZ's floating rate has been moved up 40 bps to 8.14%, which is comfortably lower than the rate offered by the other large banks.

It will be interesting to see what the Reserve Bank makes of the division that's now forming between higher short-term fixed rates and lower longer term rates.

The RBNZ has been busily trying to talk the banks into raising both mortgage rates and deposit rates, but without a great deal of success. It doesn't want to see mortgage rates dropping from current levels because it wants to keep the pressure on with its fight to get inflation back into the 1% to 3% range. We are a long way from seeing that, with the latest annual inflation rate as of the end of March coming in at 6.7% - albeit that this was a reduction from 7.2% previously.

The surprise 50 bps rise to the OCR by the RBNZ earlier this month, taking it to 5.25%, was designed to push the banks into action on rates. But the response has been muted, with the major banks choosing to tweak shorter rates by less than that 50 bps rise, while trimming longer rates. There's been very little action in deposit rates.