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Five major banks write 94% of mortgages in New Zealand, which makes them our 'big five'.

The Big 5 Lenders

Lender 1 Year 2 Years 3 Years
ANZ 3.05% 3.35% 3.99%
ASB 3.05% 3.39% 3.69%
BNZ 3.09% 3.35% 3.69%
Kiwibank 3.09% 3.39% 3.65%
Westpac 3.09% 3.39% 3.69%

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Featured News

Newspapers stacked on surface next to a mug and saucer
07 April 2020

Lockdown week two: market update

We’re two weeks into New Zealand’s level four lockdown and we haven't seen any further movement on mortgage rates. It seems that 3...

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Top view of laptop, pad of paper, pen and graph with data sitting on table
01 April 2020

Guest post: mortgage rate update

Squirrel's CEO John Bolton shares his views on what's in store for mortgage rates.

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Laptop on home office desk with graph on screen
01 April 2020

Covid-19: Mortgage rates and housing market forecast

There are a lot of what if’s at the moment. While there’s no crystal ball to consult, here’s our take based on what we’re seeing.

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How much can you borrow?

Top 5 FAQs

When purchasing an owner-occupied property you can generally borrow around five times your gross annual income. Lenders will require evidence that you're in a position to service the mortgage based on paying it off over 30 years, and at a mortgage rate of around 7.50% (higher than actual rates). If you have a rental property, 75% of the rental income can be included for testing your ability to afford the loan.

Banks offer better mortgage rates (and cash backs) to customers that have at least a 20% deposit. You must have at least a 10% deposit to access your KiwiSaver, so this is where most lenders draw the line. Banks are permitted to have 15% of their owner-occupied borrowers with less than 20% deposit. The cut-off for rental properties is a 30% deposit.

New properties are exempt from Reserve Bank restrictions, making it possible to buy a new property with as little as a 5% deposit, but the issue with KiwiSaver still applies.

90% of the market is on fixed mortgage rates because they are lower than floating rates. The most popular fixed rate term is the 2-year term as it tends to be the term that banks compete the most aggressively on. Longer term fixed rates provide more certainty. When mortgage rates are low it can be a good time to consider fixing into a longer term fixed rate. Be wary of early repayment fees, and if you repay a fixed rate mortgage early you might have to pay a cost.

Splitting your home loan across multiple fixed rate terms means your entire loan won't mature at once. It allows you to always have part of your loan maturing that you can make lump sum payments into as well as the certainty of having part of your loan still fixed. If mortgage rates are going up, splitting your loans will smooth out the impact and make it easier to adjust to higher rates.

When you repay a fixed rate loan early, the lender also needs to break its fixed rate funding. This is a real cost to the lender, which the lender passes on to you as a fee. These costs only typically occur if mortgage rates drop between when you fix and when you repay. Roughly it’s the rate difference applied to the loan balance over what would have been its remaining fixed rate term.