Can't decide whether to fix that mortgage for one year or for two?
Why not split the difference and go for an 18-month term?
According to the latest monthly figures in the Reserve Bank's recently introduced data set on new lending fully secured by residential mortgages, October saw owner occupiers continuing to take a greater interest in the previously unfashionable 18 month fixed terms.
This is a new data series and so the information goes back only to 2021 - but previously 18 month mortgages have not been a much-considered option.
A year ago, in October 2022, just 4.8% of the new mortgage money taken up by owner occupiers that month was for 18 month terms.
Now the figure is 16.5%. Go back to June this year and it was 12.4%. The ascent has been on during this year.
One-year mortgage terms have tended to be the most popular in the timeframe of this data series, though on occasions the two-year terms have exceeded the one-years.
If we go back a year again the one-year terms attracted 33.2% of new owner-occupier mortgage money, while for one-year it was 26.7%.
As of June the one-year fixed terms had a 27.1% share to 18.3% for the two-year terms. But as of October, the one-year term share had dropped to 25.2%, while the two-year was up to 24.2%, having risen from just 23.4% in September.
At this rate the two-year term may be about to take over again, at least for a while as the most popular option. The last time it was more popular than one-year was in January of this year.
It's been clear since the start of this data series that the Kiwi mortgage customer is very keen on getting the best looking rate - and they are therefore flexible about the length of term depending on how favourable the rate looks.
One clear thing to note has been that in recent times the one-year and two year rates have flipped over, with the one-year rates now more 'expensive' than the two year rates.
The RBNZ's summary of average new 'special' rates each month shows that as of October the average for a one-year fixed rate was 7.26%, versus 7.01% for two-year. The 18-month is setting snugly in the middle somewhere with 7.1% average.
For investors, the clear favourite choice remains the one-year rate.
In its summary of the latest data, the RBNZ said in October one-year terms made up 32.7% of the new investor mortgages, up from 31.6% in September. In October one-year terms were next with an 18.9%, but 18 month terms are starting to get attractive for the investors too - with the share rising to 16% from 13.9%.
The share of total new residential lending on fixed interest rate terms decreased to 82.6%, down from 82.8% in September which was the highest share on record
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