Many Brits choose to emigrate to Australia and New Zealand and rates have fallen due to a rate war between lenders.

Both ASB Bank and Kiwibank reduced rates last week and the Bank of New Zealand (BNZ) has now followed suit.

BNZ has launched a two-year fixed rate product at 4.99%, the first time a sub-5% deal has been available in the country for two years.

This follows the decision of the central bank in New Zealand to cut the base rate from its previous level of 3.5% to 3.25% earlier this month.

That decision had taken the market by surprise with analysts previously expecting the rate cut to take place later in the year.

Analysts now believe further rate cuts will see the average mortgage rate close in on Australia’s level.

Australia’s base rate – referred to as the cash rate – is currently at 2% with two-year mortgages typically available at 4.39%.

Research released last year showed New Zealand was proving an increasingly popular destination for Brits moving abroad.