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With interest rates set to stay low, a war is erupting between banks battling to attract new customers.
This morning, the Reserve Bank kept the Official Cash Rate (OCR) at its record low of 2.5% and economists expect it will now not move for the rest of this year.
With some banks offering to pay the 'break' fee, often several thousand dollars, to new customers changing banks, conditions are very good for borrowers with mortgages avaliable for as low as 5%.
Gareth Vaughan from Interest.co.nz says the new expectations of a OCR on hold for longer, means that banks will continue to compete aggressively for new customers.
"The banks in recent times have been cutting their fixed term mortgages - and in many cases they're now lower than the floating rates. So we would suspect there's a bit of a trend back towards fixed at the moment," he said.**
First homeowner, Elyse Guise says it was difficult to buy, particularly with so much competition on the market.
"By the time we found something either on the internet or through the paper - by the time you rung up to ask to have a look through it was already gone."
However, Guise said she was chose to buy because interest rates are so low.
Financial information website Sorted spokesperson David Kneebone cautions about investing in property.
"Of course lower mortgage rates also mean savers suffer with lower deposit rates. But while savers shop around for their best deals, borrowers need to decide whether to go with a fixed or floating mortgage.
"If you have a floating rate now, I'd suggest thinking about paying off more debt than you are currently. We just don't know what is going to happen to interest rates in the future. What we do know is that they are remarkably low right now. If you are contemplating buying a house, don't just look at the current rates," Kneebone said.
Mortgage rates - Bank calculators
Click here for ANZ's mortgage rates.
Click here for ASB's mortgage rates.
Click here for BNZ's mortgage rates.
Click here for KIWIBANK's mortgage rates.
Click here for NATIONAL's mortgage rates.
Click here for WESTPAC's mortage rates.
Term deposits - $10,000 invested for one year:
ANZ 4.2%
ASB 4.3%
BNZ 4.5%
KIWIBANK 4.5%
NATIONAL 4.2%
WESTPAC 4.3%
* According to the major banks' websites today. Different banks may
have different conditions and rates are subject to change.
** An earlier version of this story incorrectly quoted Vaughan as
saying "So we would suspect there's a bit of a trend back towards
floating at the moment".
This should have read "fixed" - we apologise for the
error.