Late Monday Westpac made its responding cuts to its fixed rate card.
Now BNZ has chimed in with its version. And Heartland Bank has also announced reductions.
All this means that BNZ has now joined Kiwibank with the lowest carded offer for a six month fixed term.
Kiwibank retains the lowest rate for a one year fixed term.
All main banks are on 5.19% for 18 months. But ICBC offers 4.99% for that term.
4.99% is now almost universal from main banks for a two year term, except Kiwibank.
ANZ and BNZ now have the lowest three year rate.
Westpac has the lowest four and five year rates.
All these lower rates are only possible because term deposit rates are being pushed lower to 'pay' for the home loan drops. Wholesale rates are just not shifting in this same way.
Overall however the key one year rate in the 5.19% to 5.29% range is back to levels we last saw in September 2022.
The reader-reported mortgage rates are less of an advantage now, but 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 February 25, 2025 | % | % | % | % | % | % | % |
| ANZ | 5.89 | 5.29 | 5.19 | 4.99 | 5.29 | 5.99 | 5.99 |
| current reader-reported rates | 5.79 | 5.15 | 5.12 | 4.99 | 5.29 | ||
 |
5.89 | 5.25 | 5.19 | 4.99 | 5.35 | 5.79 | 5.79 |
| current reader-reported rates | 5.85 | 5.25 | 5.15 | 4.99 | 5.29 | 5.69 | 5.69 |
 |
5.79 -0.10 |
5.29 -0.26 |
5.19 -0.20 |
4.99 -0.30 |
5.29 -0.30 |
5.69 | 5.79 |
| current reader-reported rates | 5.69 | 5.24 | 5.12 | 4.99 | |||
 |
5.79 | 5.19 | 5.19 | 5.59 | 5.79 | 5.89 | |
| current reader-reported rates | |||||||
 |
5.89 -0.10 |
5.29 -0.20 |
5.19 -0.10 |
4.99 -0.30 |
5.39 | 5.39 | 5.39 |
| current reader-reported rates | |||||||
| Bank of China | 5.85 | 5.49 | 5.35 | 5.25 | 5.49 | 5.49 | 5.49 |
| China Construction Bank | 5.99 | 5.57 | 5.39 | 5.44 | 5.59 | 6.40 | 6.40 |
| Co-operative Bank (*=FHB only) | 5.89 | 5.39* | 5.49 | 5.49 | 5.69 | 5.79 | 5.79 |
| Heartland Bank | 5.25 -0.24 |
5.19 -0.20 |
5.19 -0.20 |
5.35 -0.10 |
|||
| ICBC | 5.89 | 5.29 | 4.99 | 5.19 | 5.39 | 5.49 | 5.49 |
 |
6.09 | 5.69 | 5.49 | 5.49 | 5.59 | 5.79 | 5.79 |
 |
5.89 | 5.35 | 5.49 | 5.29 | 5.59 | 5.79 | 5.89 |
Fixed mortgage rates
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23 Comments
This isn't how term mortgage rates (1yr+) work. The 25 point cut is already priced into the term mortgages (in fact 28 points is priced), so if the 25 point occurs, all other things being equal, term mortgage rates won't move. What will happen, is that the floating and 6mth rates will drop and if the easings turn out the way they are currently expected, we will end up having a mortgage curve that has a similar rate from 6 mths to 3yrs sitting around the 5% level. Current pricing for the next 4 RBNZ meetings is approximately -28 points, -16 points, -10 points and -7 points, totalling 61 points. This would bring the OCR down to 3.14%. Obviously it will end up being either 3% or 3.25% depending on what happens in the next few months. This is a level where the RBNZ feels that the neutral rate is. If the rate ends up being 3.25%, you would expect that the mortgage curve would sit somewhere between 4.75% and 5.25%. The curve will be positive (i.e. longer terms will be higher than shorter terms) due to the term premium of the swap curve that the banks price off. So in summary, unless expectations for the economy change for the worse, don't expect significantly lower rates than the 4.99% 2 year currently being offered. This rate is ~150 points over the current 2 yr swap rate and the banks don't tend to go much below this.
I did expect a bigger drop considering 50bp off OCR,
Seems like we only dropped 20-25bp at best,
Given the state of the economy I am surprised that 5 year rates arent better.
Why don't banks take a risk and try to lock in mortgages for longer?
5.39 is terrible value
We are a long way away from higher interest rates IMO
Fixed rates are dependent on wholesale rates and to a lesser extent on marketing. If the wholesale rates for longer terms were lower then the mortgage rates would be lower. Banks are risk adverse - they don't gamble on their shareholders' behalf. If a customer takes out a 5year mortgage, bank borrows that for 5 years at the current rate.
Correct, and lack of knowledge re where funding comes from... banks are front running the indicated cuts to win business...
There is no growth growth growth in mortgage new lending compared with the Ponzi's past, hence they are also willing to cut their margin a bit to keep business.
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