One of the most common questions we get from clients is: should I fix my mortgage, go floating, or do a split? There's no one-size-fits-all answer — but understanding how each option works will help you make the right call for your situation.
What is a Fixed Rate Mortgage?
A fixed rate locks in your interest rate for a set term — typically 6 months to 5 years. Your repayments stay the same for that period, giving you certainty and protection against rate rises. The downside is that breaking a fixed term early usually incurs a 'break fee', which can be significant.
What is a Floating Rate Mortgage?
A floating (or variable) rate moves with the market — specifically with the Official Cash Rate (OCR) set by the Reserve Bank of NZ. When rates fall, so do your repayments. When they rise, so do your costs. Floating rates offer full flexibility: you can make lump sum payments or repay your mortgage early without penalty.
What is a Split Mortgage?
A split mortgage divides your loan between fixed and floating portions. For example, 70% fixed for certainty on the bulk of your mortgage, and 30% floating so you can make extra repayments with any windfalls. This is often the most sensible approach for most New Zealand homeowners.
How to Decide: Key Questions to Ask
Consider: How long do you plan to stay in the property? Do you expect rate movements up or down? Do you have extra income to make lump sum payments? How sensitive is your budget to repayment increases? Your adviser will walk you through a full scenario analysis.
What We're Seeing in the Market (2026)
New Zealand mortgage rates have been gradually easing after the highs of 2023–24. Short-term fixed rates (1–2 year) are currently more competitive than long-term fixed rates for most clients. We monitor the market daily and can advise on the optimal structure for your specific circumstances.
Not sure which rate structure suits you? We'll model out the options and give you a clear recommendation.