BNZ is the latest bank to trim fixed mortgage rates.
It was the original adopter of the six month 5.99% rate to where most of the rest have now shifted.
And Wednesday, they have set a new low benchmark of 5.29% for a two year carded fixed rate. This is the lowest fixed rate for any bank at present, even lower than Heartland Bank's two year offer. BNZ last had a two year rate this low in June 2022.
BNZ's other reductions just allow it to keep pace with its main rivals. But its new aggressive two year rate is interesting.
BNZ has not announced any matching term deposit rate changes although some are expected. It's only one of two main banks (with Kiwibank) with a 5% term deposit (TD) rate offer still in the market. Given the 5.29% two year fixed mortgage rate, it is hard to see how BNZ can maintain a 5% TD offer.
Generally, home loan rate cuts are 'funded ' by savers, so we won't be surprised to see changes from BNZ come through soon.
Borrowers should not expect much flexibility by banks on below-card discounts. The option for cashbacks are probably closing fast now too.
Wholesale rates are now basically stable, limiting the funding option of chasing wholesale down. That option is closed off at present.
The reader-reported mortgage rates are fluid and may be less frequent now, so please record them, if you have them. We need you to record them in the comment section below, which helps us stay on top of this fast-changing corner of the home loan rates market.
And still negotiate. How flexible they may be will depend on the strength of your financials.
One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below.
And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. Break fees will be minimal in a rising market. But they become important in a falling market, like now.
Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.
| Fixed, below 80% LVR | 6 mths | 1 yr | 18 mth | 2 yrs | 3 yrs | 4 yrs | 5 yrs |
| as at January 22 2025 | % | % | % | % | % | % | % |
| ANZ | 5.99 | 5.57 | 5.39 | 5.44 | 5.59 | 6.19 | 6.19 |
| current reader-reported rates | 5.89 | 5.55 | 5.39 | 5.44 | 5.59 | ||
 |
5.99 | 5.59 | 5.39 | 5.49 | 5.59 | 5.79 | 5.79 |
| current reader-reported rates | 5.95 | 5.59 | 5.39 | 5.49 | 5.59 | 5.69 | |
 |
5.99 | 5.59 -0.20 |
5.39 -0.20 |
5.29 -0.30 |
5.69 | 5.79 | 5.89 |
| current reader-reported rates | 5.95 | 5.58 | 5.39 | 5.29 | 5.55 | 5.59 | 5.79 |
 |
6.15 | 5.79 | 5.59 | 5.69 | 5.79 | 5.89 | |
| current reader-reported rates | |||||||
 |
5.99 | 5.79 | 5.69 | 5.49 | 5.59 | 5.59 | 5.59 |
| current reader-reported rates | 5.99 | 5.59 | 5.39 | 5.49 | 5.59 | 5.59 | 5.59 |
| Bank of China | 6.19 | 5.79 | 5.59 | 5.49 | 5.49 | 5.49 | 5.49 |
| China Construction Bank | 6.24 | 5.79 | 5.59 | 5.59 | 5.59 | 6.40 | 6.40 |
| Co-operative Bank (*=FHB only) | 5.99 | 5.49* -0.30 |
5.49 -0.20 |
5.49 -0.10 |
5.69 | 5.79 | 5.79 |
| Heartland Bank | 5.49 | 5.39 | 5.39 | 5.45 | |||
| ICBC | 5.99 | 5.79 | 5.59 | 5.59 | 5.59 | 5.59 | 5.59 |
 |
6.24 | 5.89 | 5.59 | 5.49 | 5.69 | 5.69 | 5.69 |
 |
6.19 | 5.69 | 5.79 | 5.59 | 5.59 | 5.69 | 5.69 |
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16 Comments
I know no one can predict the future, but I'm up for renewal today with BNZ. Was going to float until they cut but looks like I don't have to. Very torn.
I'm considering throwing the whole thing in for 6 months and gambling the renewal rates will be lower then.
This 2 year rate though is such a significant cut I'm torn now. Considering going half 2 years half 6 months.
Anyone got 2c?
We are currently paying over 6 so it's not catostrophic if it ends up backfiring and going up a bit, but I'd love to lock in 2 or 3 years at sub 5 if possible.
Anyone had this before?
Home loan - Limit of $300k but we paid the additional 20% without charge as per fixed rate conditions over a period and the amount showing in the balance is now $280k. On the app its shows loan limit $300k, amount owing $280k
Renewal is in late Feb, the repayments to refix are based on the loan limit not amount owed.
In effect repayments on limit would be around $910 fortnight but if based on the amount owed its $840 - $70 difference a fortnight. I have queried and awaiting response. Nearly $2k difference over a 12 month period.
I would imagine it's an industry standard but if that the case I would change banks, we would only have to cover amount owed then start with $280k amount owed with repayments based off that at new bank.
Correct me if I am wrong.
I have a refix (main loan) with ASB coming up tomorrow, debating going on floating for a month until the OCR release in hopes that 6mo/1yr will jump down again, or taking the 1 year fixed at 5.59% (no discounts in app yet). 18mo at 5.39% is still too high I think.
Here's an outlier scenario that may be worth thinking about:
In the 1960s and 1970s it's a fact that many house sales were effected by the vendor 'leaving in' to the purchaser either a first or a second mortgage usually for durations of between 1 or 2, or even up to 5 years.
I stress that this was a very common practice that the banks, holding a monopoly on mortgages, would not want to see a return to.
It's quite possible that these days the banks would not loan you a first mortgage if you told them you were also taking on a (usually a much smaller) second mortgage as well, even if you could afford the repayments on both mortgages....however, the Commerce Commission might have something to say to the banks about that.
Such vendor mortgages would be 'interest-only' thus reducing the outgoings to the purchasers in the first say two or three years of house owning.....a benefit to the purchasers.
With the housing market still languishing because employment prospects and the global outlook are still uncertain, some vendors, especially landlords who are not dependent on the sold house for living in themselves, could benefit by 'leaving in' even a first mortgage for say two years by which time bank mortgages could be in the 4's or even 3's percentages.
For instance, if a vendor 'left in' to a FHB working couple a first mortgage of $400,000 at say 4.5 % interest only (=$18,000 per year or just under $700 per week). The vendor still has plenty of security by way of the deposit paid. Now if the vendor were to put that $400,000 into a bank 2 year term deposit, assuming he could still sell his house at an acceptable price without 'leaving in' any mortgage, he could, not that far into the future, only be receiving 3.75 % or 3.50 % from his bank term deposit.
In summary, the vendor possibly actually achieves a sale at a higher price and achieves a higher return on that mortgage amount he 'leaves in'.
The purchasers get to pay more manageable mortgage outgoings during the first 2 or 3 years of ownership and would hopefully be paying a reduced interest rate when they switch to a bank mortgage after the 2 or 3 years.
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