It’s all looking pretty quiet on the interest rates front at the moment.
After getting a little bit of downward movement in fixed term rates after our last Official Cash Rate (OCR) announcement, things have settled over the last week or so.
Most major lenders are now offering a one-year rate of 4.89%. That’s already a really solid rate.
Shorter-term rates should have a little further to fall from here a reflection of the fact that the New Zealand economy is still relatively weak (although starting to show signs of recovery).
The two-year rate is sitting slightly higher at 4.95%, while the best three-year rate on offer is currently 4.99%.
There’s a bit of a question mark hanging over the future of longer-term interest rates at the moment, with lots of inflationary forces—Trump’s tariffs and the Iran-Israel conflict impacting oil prices—threatening to push them upwards.
In light of all that, that three-year rate at 4.99% is, again, really attractive. If you’re thinking about locking in part (or all) of your mortgage longer-term, it’s likely not worth waiting around for them to get any lower.
The recommendation for borrowers at the moment is still to split your mortgage across a mix of shorter and longer terms. That could look like having part fixed for a year, and then the remainder fixed for two or three—especially if you can get a rate below 5.00%.
Check back next week for the latest news on New Zealand interest rates.
