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Mortgage price wars heat up

ANZ has followed Westpac in slashing its one year special rate to 2.29%, the joint lowest "big four" rate in the market. 

The new special rate, effective this morning, is the latest salvo fired in the mortgage wars that continue to heat up, amid a battle for prime mortgage borrowers.

With the Reserve Bank's new Funding for Lending Programme, interest rates are set to fall further this year, despite growing predictions that the OCR will stay on hold. 

ANZ's new rate is available to people with a 20% deposit, and customers must have an "ANZ transaction account with salary direct credited".

The bank has also cut its standard one year rate by 20 basis points, slashing the price to 2.89%. 

The ANZ special rate is level with Westpac as the joint cheapest big four rate in the market, yet Heartland's 1.99% online mortgage, a limited offer, leads the way in the one year stakes. 

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