Westpac has begun advertising mortgages to homebuyers with deposits of less than 20%.
Since the credit crisis began last year, most banks had raised required deposits from 10% to 20%.
Westpac continued to lend to some homebuyers with deposits of less than 20% throughout the credit crisis.
But Massey University banking lecturer Claire Matthews says the bank's decision to start advertising the option again is significant.
Ms Matthews says the bank is prepared to take on more lending risk, even in an uncertain housing market to build market share.
Mike Pero Mortgages chief executive Shaun Riley says there are no signs yet that other major banks will follow Westpac's move.
Given the uncertain outlook for the economy and jobs, Mr Riley does not expect a rush of customers.
Rival bank ASB says it has no plans to match Westpac's offer, as it believes there is not a big demand for low equity loans.
ASB says it already offers loans with a deposit of less than 20% and has no intention of aggressively expanding that part of its lending.
Westpac has been reported as saying lower interest rates and more realistic prices by vendors had prompted it to promote the low-deposit loans.
But ASB's head of retail banking Ian Park says people are still worried about taking on too much debt while there is so much economic uncertainty.