The timely reductions also cushioned rises in petrol and food prices. The Reserve Bank cut the official cash rate from 3 per cent to 2.5 per cent, and accordingly the trading banks reduced their variable/floating rates by the same amount - after earlier cuts to fixed-term rates.
The variable is as low as 5.65 per cent, provided by Kiwibank and SBS Bank, while others are around 5.75 per cent.
A one-year mortgage rate is also under 6 per cent, with HSBC offering 5.79 per cent and most of the others around 5.95 per cent. The major trading banks are offering two-year rates at between 6.40-6.49 per cent, but TSB Bank is down to 6.28 per cent.
Brian Berry, a director of Tauranga-based Rothbury Financial Services, said mortgage-holders on the variable rate would automatically have their rate changed, and the cost of switching from a fixed rate usually balanced out the saving from a lower variable.
"It's best to ride out the fixed rate [until it's up for renewal] before going on the variable," he said. "But it looks like the variable is the way to go for most of the year."
Mr Berry said people had to keep a close eye on the latest economic data, both in New Zealand and overseas, particularly the United States.
Rising inflation was a worry and economies, including New Zealand's, would have to move to control this at some stage. "Interest rates could go up quickly when they do move," Mr Berry said.
Mr Riley and Mr Berry said a majority of clients were taking out mortgages on the variable rate and they should consider fixing later in the year.
Once the reconstruction efforts in Christchurch gain momentum next year, interest rates should rise to control inflation. And an improving US economy meant the local trading banks' cost of offshore borrowing would increase, pushing up fixed-term rates.
Mr Riley said people could lock into attractive two- and three-year rates under 7 per cent and that gives longer-term certainty.
The lower mortgage rates have made it easier for first-home buyers to get on the property ladder - and investors are again eyeing rental properties as rents stay firm or increase slightly. A first-home buyer taking out a $270,000 table mortgage, after making a deposit of $30,000, would pay $362 a week on a variable rate of 5.75 per cent.
As house prices remain steady - having fallen on average more than 10 per cent over the past year - investors can now purchase a $300,000 three-bedroom house and obtain rent of up to $350 a week. That gives them more than a 10 per cent return, before rates, insurance and maintenance costs.
Mr Berry said there were opportunities for first-home buyers, and possibly investors, that weren't available 18 months to two years ago.
"This is fantastic, especially for first-home buyers who perhaps thought the opportunity to purchase a home has passed them by," he said. "Provided their incomes are secure, they have the comfort that interest rates are going to stay relatively low for some time yet, and that may motivate them to take the plunge into the market."
Certainly, real estate agents are saying there's never been a better time to buy.
