The bank's low two year product came into effect this morning, as the state-backed lender looks to bring in more customers in a flat market. The new special rate is 20 basis points below its old 4.19% rate.
It comes after the lender, led by Steve Jurkovich, (pictured) cut its two year rate earlier this month. The move is likely to see other lenders follow suit with their two year offerings.
The Kiwibank product will be available for customers with at least 20% equity in their home. The move comes as other major lenders slash their prices at the beginning of the year, raising the prospect of another price war.
Westpac cut its one year rate to 3.99% two weeks ago, as the big banks look to lure customers able to navigate tougher servicing tests and lingering LVR restrictions.
Recent data shows first time buyers continue to be active in the market, raising their share of overall property sales, but movers have been more subdued. 2018 Q4 figures from research firm CoreLogic show owner-occupiers took a 26% share of the market, their lowest since mid 2009.