The market leaders for three-year rates are currently Kiwibank, HBS Bank and SBS Bank, all of which are at 5.65 per cent.
The five-year market leaders are SBS Bank, Westpac, Kiwibank, HBS Bank and Co-operative, at 5.99 per cent.
Mortgage approvals reached their highest levels in almost four years last month as people rushed to make the most of low interest rates.
NZ Institute of Economic research principal economist Shamubeel Eaqub said many may have been refinanced loans as home-owners took advantage of low interest rates from other providers.
"Even the threat of re-financing with a different bank will quite often lead to a discount at your current bank.
"More often than not, there's a difference between what's advertised and what you can get if you talk to your bank manager.
"You'd see something advertised on the board, you go in and talk to your bank and it might be different. It'll depend on your personal circumstances."
New Zealand banks often sourced funds from overseas to lend out and global interest rates had fallen for long-term borrowing, he said.
"So banks are using that opportunity to compete for longer fixed term mortgages. Shorter duration borrowing costs are mostly unchanged in international markets and in local mortgages."
Global rates were low because central banks around the world were trying to revive the global economy from the lingering effects of the global financial crisis, he said. The key central bank, the Federal Reserve of the US, expected to keep interest rates very low until 2015 and it was reducing the cost of longer-term borrowing in international markets.
Short-term borrowing costs for New Zealand banks were more affected by local conditions.
This was particularly by the actions of the Reserve Bank, which had kept its Official Cash Rate on hold at 2.5 per cent for almost two years and was likely to keep it there.
"The Reserve Bank won't want to lure interest rates," Mr Eaqub said.
"The housing market is picking up, people are borrowing more, they're stretching themselves more. That poses a risk, that we might have a runaway housing market like we had in 2007 and 2008. They would be (loath) to see that repeated."
He said when one bank dropped its rates, other banks planning to undercut usually did so within the month.
The OCR is also closely correlated with floating mortgage rates, while floating rates are more influenced by the global market.
Financial commentator Bernard Hickey, who had long been a fan of a floating rate, said in his blog this week he planned to float half and fix half of his mortgage. Because the OCR was unlikely to drop, meaning floating rates were unlikely to drop, his views were changing on the two.
New Zealand Federation of Family Budgeting Services chief executive Raewyn Fox said she encouraged people to think about taking out redundancy insurance when buying a house.
"The first advice we give anybody in this situation is sit down and do a really thorough budget of what your costs and outgoings are going to be once you get a house.
"It's not just the mortgage you have to pay, it's the rates, the insurance, the maintenance, the upkeep.
"We encourage people to think long-term ... is the wife going to stop working and have a baby and will the mortgage be sustainable?"
Darryl Evans, of the Mangere Budgeting Service, said he encouraged buyers to consider alternative institutions to banks for home loans, such as credit unions.
Loanleaders
Market leaders for long-term fixed home loan interest rates
Three-year: Kiwibank, SBS Bank, HBS Bank, 5.65 per cent
Four-year: ASB, 5.95 per cent
Five year: SBS Bank, Westpac, Kiwibank, Co-operative, HBS Bank 5.99 per cent.
Source: interest.co.nz
