HSBC, Bank of Queensland, National Australia Bank and New Zealand Banking Group have slashed their showcase fixed rate mortgage deals to build market share and lock-in property buyers before another cut in official rates.

ANZ cut its owner-occupier two-year fixed rate from 4.59 per cent to 4.14 per cent. Bank of Queensland also dropped its three-year fixed rate owner-occupier to 3.69 per cent. HSBC slashed its one to three-year rates from 16 basis points to 26 basis points. NAB also cut its one, two, three, four, and five-year terms for owner-occupiers.

Smaller lenders, like Newcastle Permanent, have also announced even lower rates and no extra charge to investors. Other lenders are expected to follow because high levels of housing debt mean lenders are increasingly switching to cheaper deals.

On the other hand, lenders like the Teachers Mutual Bank and BankWest have stopped some of their fixed rate offers to avoid going over the 10 per cent speed limit imposed by the Australian Prudential Regulation Authority. This creates an opportunity for competitors to build market share and offset the potential loss of business following foreign lending crackdown.

According to Canstar, lenders are competing for the lucrative fixed term borrowers, typically for two and three-year terms. Three-year rates are the most popular, accounting for one-fifth of the searches in Canstar’s website.

Meanwhile, lending growth remains strong at around seven per cent, well above income growth. Lenders are also locking in at current funding rates.

“Strong housing sector growth may limit the Reserve Bank of Australia’s ability to cut the cash rate unless tighter macro-prudential measures are exposed,” said Martin North, principal of Digital Finance Analytics.

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan