Records have been broken in the mortgage market. Heartland Bank has released the lowest home loan rate in New Zealand history.

The bank announced a one-year fixed loan rate at 1.99 per cent.

To be eligible customers must be refinancing or purchasing a standalone house on a single section in a major New Zealand centre, have a deposit or equity of at least 20 per cent and intend to live in the home.

In addition to the rate change, Heartland is also offering a fixed two-year rate of 2.35 per cent and a three-year rate of 2.45 per cent.

Director of New Zealand mortgages and securities James Kellow told Mike Hosking he believes it will become the norm.

"The base rates are converging on zero, which the positives don't like very much. But the flip side of that is the borrowers, I can see interest rates definitely one-seven-five next year and maybe lower."

"There's definitely a trend down... as competition increases - Heartland starting it here - all borrow rates should start to trend down."