HERE'S some free advice for the ANZ. Eviscerate your competition when you meet to set mortgage rates on Friday. Make their Christmas hell.

The National Australia Bank is extraordinarily vulnerable. Positioning itself as the consumer's friend, it has guaranteed to offer the lowest standard variable mortgage rate of the big four all year.

But it went out on a limb on Wednesday, passing on only 0.20 points of the Reserve Bank's 0.25-point cut, doubtless expecting the other banks to follow. Westpac and the Commonwealth did.

But the ANZ sets rates on a different cycle, considering such questions only on the second Friday of each month, giving it time to think.

It has the opportunity to break from the pack (a bit) by cutting 0.22 points.

The NAB would be blindsided. The cut would take the ANZ rate to 6.38 per cent, exactly the same as NAB's.

To fulfil the terms of its pledge to offer the lowest rate, the NAB would have to cut again, embarrassing itself by implicitly admitting it sold its customers short last week.

The ANZ would steal the mantle of innovator from the NAB, gain much-needed mortgage customers and put beyond doubt that at least one of the banks was prepared to compete on price.

Importantly, the opportunity is a one-off. The NAB's pledge expires at the end of this year. It has made itself a soft target for one month only. If I was running the ANZ, I would take aim.