The lowest rate offered in New Zealand was Kiwibank's 4.79 per cent in 2013. Property financier James Kellow expected to see a repeat of that.
"Inflation figures next week will probably show it's 0 per cent and [Reserve Bank Governor Graeme] Wheeler will have no choice but to drop rates," said Kellow.
"Our retail banks will be keen to maximise their market share and home loan volumes.
"They will follow the wholesale funding market with interest rate cuts as sure as night follows day."
Banks have already chopped interest rates - on Monday Kiwibank introduced a new five-year home loan rate of 5.89 per cent for buyers with a deposit of at least 20 per cent, slashing 60 basis points.
That has been matched by others offering special deals, including Westpac, ASB, ANZ and BNZ. They are also offering sweeteners to lure new customers in the form of cash incentives.
Kellow said Australian rates were now below 5 per cent and the Reserve Bank of Australia was tipped to cut its official cash rate.
"New Zealand has the highest rates in the developed world. Some of us in the property finance sector have been saying for months that interest rates would start falling this year. Unfortunately for many of those borrowing and fixing last year, they were fed the line of fix now for two or three years as interest rates may be 8 per cent in 2015."
Mortgage broker Glen McLeod agreed lower rates were possible. "If the Australian Reserve Bank drops their rate, that will put a lot more pressure on ours to go down."
Some say that low rates, which fuel the overheated property market in Auckland, might see the introduction of more tools to cool prices like the controversial loan-to-value restrictions.
Westpac chief economist Dominick Stephens said: "We have to seriously consider that the next move could be a tightening, not a loosening.
"That wouldn't necessarily be a tighter LVR limit, although the only other housing-specific tool in the kit is higher bank capital requirements for home loans, which would probably take some time to phase in."
Broker John Bolton said the Reserve Bank would be "crazy" not to intervene.
"It's speculative enough as it is. We're the busiest we've been in years."
Banks were reluctant to be drawn on rates cuts, but ASB chief economist Nick Tuffley said there was a chance that interest rates would fall further.
However, it would take an OCR cut to get bank retail rates below 5 per cent.
"I don't think we will see that at this stage. We need to see the global economy get really bad for that to happen."
ANZ's Cameron Bagrie agreed. "Is [under 5 per cent] likely? No. Is it possible? Yes."