Mortgage Interest Rates in New Zealand

The interest rates charged on mortgages is pretty similar across lenders due to the highly competitive nature of the New Zealand mortgage market. Consumers can generally choose a fixed or floating interest rate. 

Floating Rate Mortgages 

Floating rate mortgages are called that because their rate can change without notice as the bank determines. This is usually driven by the Official Cash Rate, which is set by the New Zealand Reserve Bank eight times a year. 

Fixed Term Mortgage Rates 

With fixed term mortgages you select a term and a rate, and your interest rate is locked for the term (up to 5 years). This is a good idea in times when interest rates are likely to rise, whereas a floating rate is better if rates are likely to fall. A fixed rate is also good if you would prefer to know exactly how much your mortgage payment is going to be every month, as it will vary with a floating rate as the interest rate fluctuates. 

Floating & Fixed Rate Mortgages 

It is also possible to have part of a mortgage on the floating rate and the rest fixed, giving you the best of both worlds. 

Getting the Best Mortgage Product for You 

Although mortgage rates are very similar across different banks, it is well worth shopping around for a mortgage. A mortgage broker can assist you by contacting a number of different banks on your behalf, and will have a good feel of which banks it is worth approaching to get the best deal for you. The broker does not generally charge you a fee, but is paid a commission by the lender.

This article was supplied by Broadbase International Ltd (www.broadbaseinternational.com). Information contained in this article is of a general nature and is not intended as a substitute for professional advice based on your individual circumstances. Disclosure statements are available on request and free of charge.