Westpac has become the first major New Zealand bank to cut its variable mortgage rate since March 2011, opening a new front in an intensifying battle to grow higher deposit borrowing. The bank cut its variable rate for borrowers with a loan-to-value ratio of less than 80 per cent to 5.64 per cent, down from 5.75 per cent. The move to a cheaper advertised rate for high deposit borrowers is the most obvious sign so far of a 'bifurcation' or splitting of the mortgage market after the Reserve Bank introduced a 'speed limit' on loans with an LVR of over 80 per cent.The cut came despite expectations the Reserve Bank will confirm a 200 basis point increase to its official cash rate over the next two years. This could start as early as March or as late as June next year.Borrowers seem to have been listening as they've been switching from floating mortgage rates to fixed rates over the last 18 months in preparation for rate hikes, Reserve Bank figures show.