Which bank provides cheapest home loans in New Zealand?

An investment loan is taken out to buy your house or another residential property. Your property acts as security for the loan, allowing the lender to seize it in the event of failure. When the mortgage is fully repaid, the lender’s legal power to seize possession of your home ends.

What kinds of interest rates are there?

A set rate
This indicates that the interest rate you pay on your loan is set for the duration of the loan, as agreed. Most banks in New Zealand provide periods between six months and five years. Although other banks provide maturities of 7, 8, or even 10 years.

Moving Rate
The Overnight Cash Rate (OCR), on which interest rates are based, fluctuates along with the state of the economy and the financial markets.

A capped rate is a floating rate that is capped at a particular level, meaning that even if you pay a floating rate, there is a cap or upper limit at which rates will no longer increase.

It’s crucial to compare mortgage rates if you want to find the best deal. The Reserve Bank began to raise the Official Cash Rate (OCR) last October, six years after it was lowered to an all-time low of 0.25%. Currently, at 3.5%, it may increase over the following months if inflation stays high. Mortgage rates have already risen as a result of these increases in borrowing costs. According to Canstar’s mortgage database, the typical one-year fixed rate for owner-occupiers in August of last year was 2.58%. The same rate is currently 6.05% as of the writing date (October 31, 22).

The difference between the lowest rate on our tables—5.19% (1-year fixed)—and the highest—8.09%—remains very large (2-year fixed rate). Therefore, there are still savings to be had for savvy consumers who are willing to do their research and look for the lowest mortgage rates.

Which New Zealand bank offers the most affordable house loans?

Heartland Bank 1-Year Fixed

  • Rate: 5.09%
  • Minimum Equity: 20%
  • ​Fees: No establishment fee
  • Early Payment Charges: Yes

HSBC New Zealand 1-Year Fixed

  • Rate: 5.39%
  • Minimum Equity: 20%
  • ​Fees: Establishment fee – $400
  • Early Payment Charges: Yes

TSB 1-Year Fixed

  • Rate: 4.99%
  • Minimum Equity: 20%
  • Fees: Establishment fee – up to $250
  • Early Payment Charges: Yes

Kiwibank 1-Year Fixed

  • Rate: 4.39%
  • Minimum Equity: 20%
  • Fees: None
  • Early Payment Charges: Yes

ANZ 1 Year Fixed

  • Rate: 5.45%
  • Minimum Equity: 20%
  • Fees: Establishment fee – up to $500
  • Early Payment Charges: Yes

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