Understanding Mortgage Interest Rates
Mortgage interest rates are a crucial factor in determining the cost of your home loan. Whether you are a first-time homebuyer or refinancing an existing mortgage, understanding how interest rates work can help you make informed decisions and save money over time.
What Affects Mortgage Interest Rates?
Several factors influence mortgage interest rates, including:
Market Conditions: Rates fluctuate based on economic trends/ outlook, inflation, and bank policies.
Loan Type & Term: Fixed-rate and variable rate offer different rate structures.
Lender Policies: Different lenders offer varying rates based on their policies and risk appetite.
Fixed vs. Variable Interest Rates
Fixed-Rate Mortgages: Offer a stable interest rate and consistent monthly payments throughout the loan term.
Variable Rate Mortgages: Interest rates fluctuate over time based on market trends.
The market conditions, economic outlook, Reserve Bank of New Zealand (RBNZ) and Official cash rate does have a flow on impact on the variable rates.
Fixed-Term Mortgage Options
Fixed-term mortgages allow borrowers to lock in an interest rate for a set period, ensuring stability in repayments. Common fixed-term options include 6 months, 1 year, 18 months, 2 years, 3 years, 4 years, 5 years.
| Institution | Product | Variable | 6 months | 1 year | 18 months | 2 years | 3 years | 4 Years | 5 Years |
| ANZ | Standard | 6.89 | 6.49 | 5.89 | 5.79 | 5.59 | 5.89 | 5.99 | 5.99 |
| ANZ | Special | 5.89 | 5.29 | 5.19 | 4.99 | 5.29 | |||
| ANZ | Flexible home (revolving) | 7 | |||||||
| ASB | Standard | 6.89 | 5.79 | 5.25 | 5.19 | 4.99 | 5.35 | 5.59 | 5.69 |
| ASB | Orbit (revolving) | 6.99 | |||||||
| BNZ | Standard | 6.94 | 5.79 | 5.29 | 5.19 | 4.99 | 5.29 | 5.69 | 5.79 |
| BNZ | Total Money (offset) | 7.04 | |||||||
| BNZ | Rapid Repay (revolving) | 7.04 | |||||||
| Westpac | Standard | 6.99 | 6.49 | 5.89 | 5.79 | 5.59 | 5.99 | 5.99 | 5.99 |
| Westpac | Special | 5.89 | 5.29 | 5.19 | 4.99 | 5.39 | 5.39 | 5.39 | |
| Westpac | Choices offset | 6.99 | |||||||
| Westpac | Choices Everyday | 7.09 | |||||||
| TSB | Standard | 7.69 | 6.69 | 5.99 | 6.29 | 5.79 | 6.19 | 6.59 | 6.69 |
| TSB | Special | 6.89 | 5.89 | 5.19 | 5.49 | 4.99 | 5.39 | 5.79 | 5.89 |
| SBS | Standard | 6.99 | 6.55 | 5.99 | 5.85 | 5.89 | 5.95 | 6.29 | 6.29 |
| SBS | Special | 5.95 | 5.39 | 5.25 | 5.29 | 5.35 | 5.69 | 5.69 | |
| SBS | First Home Combo | 4.39 | |||||||
| Bank of China | Standard | 8.49 | 6.65 | 5.99 | 5.99 | 5.99 | 6.15 | 6.35 | 6.35 |
| Bank of China | Special | 6.59 | 5.65 | 4.99 | 4.99 | 4.99 | 5.15 | 5.35 | 5.35 |
*Interest rates are valid as at 07.05.25*
**Special rates are available with 20% deposit**
***First home loan combo offer is available for first home buyers only, and available with 5% deposit, terms and conditions applies***
****Restriction on the offset/ revolving products for less than 20% deposit****
Loan Structures: Choosing the Right Option for You
Understanding different loan structures can help you optimise your mortgage repayments and reduce interest costs over time. Here are some common options:
Offset Loan: Links your mortgage to a savings or transaction account. The balance in your account offsets the loan principal, reducing the amount on which interest is calculated.
Revolving Credit: Works like an overdraft facility where you have a set credit limit, and you can deposit and withdraw funds as needed. Interest is only charged on the outstanding balance, offering flexibility in repayments.
Redraw: Allows you to make extra payments on your mortgage and withdraw those extra funds if needed. This can help reduce interest costs while maintaining access to your money.
Benefits of Structuring Your Loan
Choosing the right loan structure can provide several advantages, including:
Lower Interest Costs: Using offset or redraw facilities can help reduce the amount of interest paid over the life of the loan.
Increased Flexibility: Revolving credit and redraw loans allow access to extra funds when needed without taking out a separate loan.
Faster Mortgage Repayment: Structuring your loan efficiently can help you pay off your mortgage sooner by reducing interest accrual.
Better Financial Management: Certain loan structures enable you to manage cash flow more effectively, making it easier to plan and budget for repayments.
Stay Updated on Mortgage Rates
Mortgage rates change frequently, so staying informed is essential. We are here to help you navigate the market and find the best rate, mortgage solution for your home financing needs.
Get in touch with our team to find a mortgage plan that suits your financial goals.
As a first-time home buyer NZ, you may be eligible for financial assistance such as the KiwiSaver First-Home Withdrawal, and First Home Loan. SK Financial Group can guide you through these options and help you understand which ones you qualify for.
While a deposit of 20% is typically required, we have options available for first-time home buyers with lower deposits. At SK Financial Group, we can arrange lending for up to 95% of your home’s value, meaning you may only need a 5% deposit to get into your first home. We’ll work with you to find the best solution that fits your financial situation.
Pre-approval is an indication from a lender of how much you can borrow before you start house hunting. It gives you a clear budget and shows sellers you’re a serious buyer. Our team can assist you in getting pre-approved, making the home-buying process smoother.
Yes, you can withdraw your KiwiSaver funds to put towards your first home deposit, provided you meet certain criteria. SK Financial Group can help you navigate the process and ensure you make the most of your KiwiSaver savings.
We offer personalized advice, access to a wide range of lenders, and step-by-step support to make your home-buying journey as smooth as possible. From securing the best mortgage rate to handling all the paperwork, we’re here to help you every step of the way.
In addition to your deposit, there are other costs such as legal fees, building inspections, registered valuer and potential loan application fees. We’ll walk you through all these expenses upfront, so you’re fully prepared for the financial aspects of buying your first home.
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