Home owners are being warned that sitting on the sidelines in the hope of lower mortgage rates could cost them in the long run.

The BNZ has turned up the heat in the mortgage war, with a one-year fixed rate of 4.35 percent.

It preempts next week's Official Cash Rate announcement, which is expected to be another cut.

Squirrel broker John Bolton says spring is a natural time for banks to advertise low rates, and he doubts rates will fall much further.

"I wouldn't call it a 'rate war' but you're certainly going to see some pretty competitive pricing over spring. It's certainly a good time to be out there negotiating your rates on your own and hopefully getting some savings."

He says while the rate is low - in fact the lowest ever advertised - its a seasonal factor and not driven by underlying market factors.

"You're going to see promotional offers coming up from all of the banks over the next two or three weeks. It won't all be rate driven, it'll be the usual cashback and all sorts of offers out there for prospective home buyers."