Fixed mortgage rates are at their lowest point in decades, but one commentator is playing down talk that it's the start a new mortgage war between banks.
Kiwibank introduced a "special" 4.99 per cent one-year fixed term rate late last month.
The bank's spokesman Bruce Thompson says the short-term promotion has been "extraordinarily successful", bringing in more than $120 million of new business in a little over two weeks.
The move prompted other banks to follow suit, but none have dropped their rate as low as Kiwibank's.
Westpac, ANZ National and ASB are now offering a one-year fixed term rate of 5.25 per cent, while TSB has dropped its rate to 5.2 per cent.
BNZ is offering a 5.1 per cent 18-month fixed term rate.
But financial commentator Bernard Hickey doesn't think banks are back in "mortgage war territory".
He says while there's been some extra competitive activity between banks in the last week, it's different to what happened in 2004 and 2006, when banks effectively engaged in a "race to the bottom" on fixed term rates.
"Most New Zealanders now are on floating rates, rather than fixed rates," he told NZ Newswire.
"Because interest rates are falling, globally and locally, and interest rates have stayed lower longer than most people expected, people are now more comfortable floating than they were back in 2004 and 2006," he said.
"Back then the overall environment was about fear of rising interest rates. Now there's not so much fear about that."
While banks were currently advertising a fixed rate lower than their floating rate, they were offering customers who asked for it a floating rate the same as their best fixed rate, Mr Hickey said.
With banks now "aggressively competing" for business, Mr Hickey said now was the time for people to approach their bank for a better mortgage deal.