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What are the current mortgage interest rates in NZ?

Out of the 6 major banks, the lowest 6 month fixed mortgage interest rate is 7.05%. This is currently offered by 4 banks. They are ANZ, BNZ, KiwiBank and Westpac.

As at Saturday 20 July 2024, the lowest 1 year fixed mortgage interest rate is 6.85%. This is currently offered by 3 banks. They are ANZ, BNZ and KiwiBank.

The lowest 2 year fixed mortgage interest rate is 6.49%. This is currently offered by 3 banks. They are ANZ, BNZ and KiwiBank.

ANZ currently offers the lowest 3 year fixed mortgage interest rate at 6.35%.

The lowest 4 year fixed mortgage interest rate is 6.39%. This is currently offered by 4 banks. They are ASB, BNZ, KiwiBank and Westpac.

The lowest 5 year fixed mortgage interest rate is 6.39%. This is currently offered by 4 banks. They are ASB, BNZ, KiwiBank and Westpac.

These interest rates were last updated on Saturday 20 July 2024.

The interest rates we've stated are accurate to the best of our knowledge at the time of writing. Interest rates are ever-changing, so be sure to double check with your bank before locking in your interest rate.

15th July - Interest rate update by April from Opes Mortgages

#1 Fixed vs floating interest rate. What's right for me?

When you choose an interest rate you can either choose a fixed or a floating rate. You should get advice from your mortgage broker about which one to choose.

But it’s important to have an idea for yourself too.

I had this conversation with an investor recently. They were weighing up the 1-year rate and the floating rate. As of Friday, the average floating rate stands at 8.55%, while the average 1-year fixed rate is 7.33%.

Both are high interest rates.

On the one hand, the investor felt the 1-year fixed rate was cheaper and more stable. She knows exactly what her mortgage payments will be for the next year. But if market interest rates drop in the next year, she’s missing out on potential savings.

If she chooses the floating rate she'll have to pay a higher rate (+1.22%). But she has flexibility to take advantage of lower interest rates ... if they come up. So she could save a substantial amount of interest over time. if you decide to pay down your loan more aggressively.

Most financial advisers will suggest a mix of the two.

I suggested this investor fix a large part of her mortgage, so she knew what her repayments will be.

But she should also leave a part of the mortgage (e.g. 5-10%) on floating. If you want to make extra payments you can do that without paying early repayment fees.

To do this, many Kiwis will use a revolving credit or offset facility.

Fixed vs Floating Interest Rate

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I had this conversation with an investor recently. They were weighing up the 1-year rate and the floating rate.

Right now the floating rate is 1.52% higher than the 1 year fixed interest rate. The average floating rate is 8.55%, and the average 1 year fixed rate is 7.03%. This is current as at Friday 19 July 2024.

Both are high interest rates.

On the one hand, the investor felt the 1-year fixed rate was cheaper and more stable. She knows exactly what her mortgage payments will be for the next year. But if market interest rates drop in the next year, she’s missing out on potential savings.

If she chooses the floating rate she'll have to pay a higher rate. But she has flexibility to take advantage of lower interest rates ... if they come up. So she could save interest over time, especially if she pays off her mortgage aggressively.

Most financial advisers will suggest a mix of the two.

I suggested this investor fix a large part of her mortgage, so she knew what her repayments will be.

But she should also leave a part of the mortgage (e.g. 5-10%) on floating. If you want to make extra payments you can do that without paying early repayment fees.

To do this, many Kiwis will use a revolving credit or offset facility.

Fixed versus floating? Which is right for me?

Most financial advisers will suggest a mix of the two.

Many borrowers fix a large part of their mortgage so they know what their repayment will be.

But they may also leave a part of the mortgage (e.g. 5-10%) on floating. If you want to make extra payments you can do that without paying early repayment fees.

To do this, many Kiwis will use a revolving credit or offset facility.

Our interest rate predictions (April 2024)

#2 ANZ vs ASB vs BNZ vs Westpac. Which bank will give me the lowest rate?

The bank with the lowest interest rates will change over time – and are not always easy to compare.

Here are some of the interest rates available from ANZ, BNZ and Westpac at the time of writing.

In this case ANZ and BNZ both offer the lowest 1-year rate of 6.85%.

The lowest 2-year rate is offered by 2 banks – ANZ and BNZ. They're both offering 6.49%.

And ASB, BNZ and Westpac all have the lowest 5-year rate, currently sitting at 6.39%.

Right now, interest rates are high. So investors are always asking me: “What’s the best interest rate?”

And they’ll sometimes look at me sideways when I suggest taking a higher 1-year rate over the cheaper 5-year rate.

But it’s not about choosing the lowest interest rate. The rate you pick depends on where you think interest rates will go. More below.

Sure, the longer term interest rate may be the cheapest today. But in a few years you might find you're locked in to an expensive interest rate.

The key message is that banks offer different rates depending on how long you fix for.

You may also be able to negotiate to get a cheaper interest rate (more on that below).

This is where using a mortgage broker is crucial.

#3 Can I negotiate the interest rate?

In the good old days, borrowers would negotiate hard to negotiate the interest rate.

This happens less today.

The banks are much more likely to stick to (or close to) their advertised rates.

But that doesn’t mean that some form of negotiation is impossible.

For instance, let’s say I’m about to re-fix my mortgage.

I'm currently with ASB (offering ~6.8%), but I can see BNZ across the road has a better offer (~6.5%).

If you or your broker asks for a discount, ASB may give you an interest rate closer to BNZ's. 

It doesn't always happen. But, often a main bank with a higher interest rate will match another main bank's rate when asked.

The key is that you – or your mortgage broker – ask. The best way to do this is to either pick up the phone or get in front of someone.

Be firm, but not threatening.

Don't say something like: “Give me this rate or I’ll walk.”

Instead say something like: “I really like this offer but I’ve seen this rate somewhere else. I’d really like to stay with your bank, so can you match it?”

You can get a mortgage broker to do your negotiating for you. Since they will usually have more experience with the banks, they may get you a better offer.

#4 1-year vs 2-years vs 5-years. How long should I fix my interest rate for?

This is something I discuss with all the investors I organise mortgages for. How long you fix your interest rate for depends on 2 things:

Generally, more conservative property owners fix their rates for longer. That's so they have certainty of what their repayments will be over time.

Property owners who are comfortable with variation will fix for shorter.

One strategy often used by many investors is to choose the 1-year interest rate every year. No matter what. Many of the investors I work with do this. Over the last 20 years that would have given you the lowest rate on average.

But this isn’t going to be the right fit for everyone.

You may not be able to afford a higher 1-year rate. It also depends where you think interest rates will head in the future.

You can use this graph to see how interest rates have changed over the past 20+ years:

How have interest rates changed?

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If you think interest rates are going up, you’ll tend to fix for longer. Because then you can keep the current low rate, even as other borrowers pay more in interest.

You might pay a little more in interest today, but you could save money over the longer term.

But if you think interest rates are about to fall you're less likely to lock in for longer.

You don’t want to take a lower rate today only to be stuck with a high rate for the next 5 years.

#5 Special vs Standard interest rate

Although banks usually stick to the advertised rate, sometimes you might not be able to get those advertised rates. 

That's because they are called "special rates". They apply to most mortgage borrowers. But not to everyone. 

You need to have at least a 20% deposit to get those rates. If you have a smaller deposit, you'll need to pay the standard rate, which is higher. And you may also have to pay an extra margin (more on this below). 

For example, here is a comparison between BNZ's current special and standard interest rates:

BNZ's 1-year special rate is 6.85%. But it's standard rate over the same term is 7.65%. So if you don't have a 20% deposit, you'll pay at least 0.60% more.

It's the same with the 3-year rate. BNZ's current special rate is 6.49%, but it's standard 3-year rate is 6.99%. That's 0.50% higher.

Here are the all main banks' standard interest rates:

There are two main scenarios where borrowers may have to pay even higher interest rates. Use the accordions to dig into the detail – 

#6 Non-bank vs Bank interest rates

You can also choose whether to get your mortgage from a bank or a non-bank lender.

Banks tend to have lower interest rates but tighter lending criteria. So it’s harder to get a mortgage approved.

So, if you can’t get a mortgage from a bank, you might decide to use a non-bank lender.

This can work well for:

  • business owners,
  • borrowers with bad credit,
  • investors with large portfolios,
  • and anyone who struggles to get a mortgage from a bank

But non-bank lenders also charge higher interest rates.

For instance, here is a comparison between Westpac (a bank) and Resimac (a non-bank lender):

Right now, Resimac's 1-year interest rate is 1.20% higher than Westpac's. Resimac's 1-year rate is currently 8.09% and Westpac's is 6.89%.

It's the same for the 3 year rate. Westpac's rate is 6.39% and Resimac's is 7.29%. So Resimac's 3-year interest rate is 0.90% higher than Westpac's.

Here are a range of interest rates for most non-bank lenders in New Zealand:

Which interest rate should I take? 

There is a lot to think about when it comes to choosing your interest rate. 

Your choice will significantly impact your mortgage repayment. 

But, as this article has shown, it’s not always a straightforward decision. That's why borrowers should talk to a mortgage broker to help choose the right interest rate for them.

Write your questions or thoughts in the comments section below.

Opes Partners
Peter Norris

Peter Norris

Mortgage broker for over 10 years, property investor and Managing Director at Opes Mortgages

Peter Norris, a certified mortgage adviser with 10+ years of experience, serves as the Managing Director at Opes Mortgages. Having facilitated over $1.2 billion in lending for 2000+ clients, Peter is a respected authority in property financing. He's a frequent writer for Informed Investor Magazine and Property Investor Magazine, while also being recognized as BNZ Mortgage Adviser of the Year in 2018 and listed among NZ Adviser's top advisers in 2022, showcasing his expertise.

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