The lowest interest rates in at least 50 years have sparked a flurry of inquiries from Bay house owners about breaking fixed contracts, mortgage brokers say.

The competition between banks has also fuelled Tauranga's heated real estate market with one real estate principal selling 23 properties under the hammer in an auction session on Thursday.

Yesterday HSBC had an 18-month fixed rate offer of 3.95 per cent while TSB's two-year fixed rate was 4.29 per cent with an Air New Zealand mystery break for two. SBS was a notch higher at 4.35 per cent for 18 months to 24 months.

Meanwhile, Kiwibank's lowest rate was 4.39 per cent for one year with the chance to win $50,000 off the mortgage. ANZ's one-year fixed rate was 4.39 per cent but was not available with its package discounts.

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Rapson Loans and Finances owner Chris Rapson said people were investigating the chance to break fixed interest rate loans but the cost, "can be quite big numbers", however it could be favourable in some instances.

He estimated that if someone had a $400,000 loan fixed at 5.59 per cent and had 18 months left to run and they could get 4.49 per cent, it would cost about $9000 to break or they could use the equity in their house.

Every bank had its own formula to calculate costs but generally it was the difference between your rate and the new rate, applied across the remaining term, he said.

Some people had broken fixed rates, and remained on a floating rate as "the general feeling in the economy is rates are going to come back even more".

The Reserve Bank used the Official Cash Rate to stimulate growth, encourage entrepreneurs and encourage people to invest into productive sectors rather than put their money in the bank, he said.

Rothbury mortgage adviser Keith Arden said he had fielded many inquiries from people wanting to break out of their existing fixed rates.

Every circumstance was different and one client had saved about $6000 a year by adopting a lower rate, he said.

But if you had to use the equity in your own home to pay the break cost, "you are still going to pay interest on that amount over a longer period".

Anybody taking advantage of a lower rate and could afford to sustain the previous level they should, he said.

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"If they can add another $50 per week to their payments the benefit is significant as there will be tens of thousands of dollars in interest saved."

Tauranga Mortgage Brokers director Tracey Robinson had fielded several inquires over the past few months about breaking fixed contracts and "in some cases it works and in some cases it doesn't".

The bottom line was entirely dependent on the gain and people needed to do their homework, he said.

However, Mr Robinson cautioned people to be aware there were other factors aside from the interest rate that would determine whether it was a good deal including cash incentives.

"The banks are still doing that and can be negotiable. Some banks, when offering a very low rate for a limited period, don't offer cash incentives. In these cases it's one or the other."

The relationship between fixed and floating rates were also quite different and "when the Official Cash Rate changes, fixed rates don't necessarily change as a result".

Fixed rates were the banks' tool for gaining market edge, he said.

interest.co.nz publisher David Chaston said the banks had a licence not to lose over breaks.

The fixed interest rates were going down but the floating rate was not and that was "disappointing", he said. Ross Stanway, chief executive of Eves and Bayleys Real Estate, said low interest rates and the increased access to finance had "without a doubt", contributed to the city's strong real estate market.

Last year was a record for the company, December 2015 was the best month ever and on Thursday, 23 houses sold in one auction session, he said.

"So that is the level of demand out there by buyers," Mr Stanway said and "it's at levels we have not seen before in most people's living memory".

Its mortgage brokers, Rothbury, had also had a lot of inquiry from first home buyers, he said.

"I guess on the other side while there is those low interest rates and banks are competing pretty strongly for mortgage business house prices are on the increase. So that is something the first home buyers have to take account of.

"They need to act reasonably quickly. They need to be purchase ready."

Tauranga Harcourts general manager Nigel Martin said interest rates and the influx of people to the city were fuelling house prices.

The situation was good for sellers and good for borrowers, he said.

There was about 100 people at one of its auctions earlier in the week, he said.

Kiwibank communications manager Bruce Thompson said competition was strong and "we are certainly seeing more activity in the regions than there was this time last year".

It had some instances of customers breaking fixed term mortgages but the figures were market sensitive, he said.

An ANZ spokesman said it expected the New Zealand home loan market to remain competitive.

The proportion of its overall customer base that broke their fixed-term loans remained small, he said.