HSBC has launched a two-year special rate of 3.69 per cent, the lowest-ever fixed home loan rate from any bank.
The rate is available to new HSBC "premier customers" with either a minimum combined home loan of $500,000 or $100,000 in savings and investments with HSBC New Zealand.
It is also open to existing premier customers who borrow an additional $100,000 or more.
The special rate is also the lowest rate that HSBC has ever offered in the New Zealand market, trumping its previous lowest rate of 3.79 per cent for a 2-year term in August 2016, which at the time was the lowest fixed home loan rate offered in the New Zealand market for over 50 years.
At the same time, HSBC has withdrawn its earlier summer mortgage campaign offer of 3.95 per cent for one, two and three-year fixed terms while reducing its two-, three-, four- and five-year fixed-term home loans to 3.99 per cent, 4.39 per cent, 4.89 per cent. and 4.95 per cent p.a., respectively.
HSBC's rate release comes as New Zealand's two-year swap rates have dipped 10 basis points from the start of 2019.
The bank's NZ chief executive Chris Russell last month told the Herald its summer campaign was designed to stimulate demand in a "softening market".
"I think there is certainly a bit of looking over the shoulder to the Australian market and wondering if it will happen here."
House prices in Sydney and Melbourne have fallen in recent months prompting concern that the falls will spread to Auckland.
"What we have seen in Sydney and Melbourne does make Auckland seem expensive," Russell said.
Russell said migration figures and GDP growth also remained strong in New Zealand.
"There is nothing to suggest we are going to have a downturn."
Mortgage brokers say anyone due to re-fix their mortgage in the next 60 days should try and lock in an offer and those who were due to end their fix term in the next six to nine months should also weigh up the cost of breaking their mortgage to re-fix it at a lower rate.
Rival banks are said to be matching the rates even if their advertised rate is higher.
A OneRoof report out this week found that the number of homeowners who have cleared their mortgages has fallen in the last five years.
The research showed that just a third of New Zealand homes are mortgage-free, despite a prolonged period of low interest rates.
This is in part attributed to high house prices, which have seen buyers take out larger home loans.
This is, in turn, placing greater pressure on New Zealanders as they get older.
Data from the Government's household expenditure surveys shows that 13 per cent of over-65s were renting and another 13 per cent were still paying off a mortgage.