Banks have steadily been lowering interest rates since the middle of the year. Photo: RNZ
Banks are making headlines with their advertised specials, but brokers say you can often get them to match a competitor's offer, anyway.
Banks have steadily been lowering interest rates since the middle of the year.
On Monday, Kiwibank said it was reducing its six-month, two-year and four- and five-year rates. That took its six-month rate to 6.15 percent and its two-year rate to 5.59 percent.
ASB and Westpac are offering 6.19 percent for six months, and ANZ 6.24 percent.
BNZ is advertising the lowest rate for that fix, at 5.99 percent. ICBC also offers 5.99 percent.
Over one year, the cheapest rate according to mortgagerates.co.nz is 5.49 percent at Heartland Bank.
Karen Tatterson, a mortgage adviser with Loan Market, said banks would generally be willing to match a big bank competitor's rate, although they might want evidence to verify it first.
Sometimes cheaper rates can be found at the smallest players. But Tatterson said while they added competition, the big banks would not necessarily match those.
Claire Matthews, a banking expert at Massey University, agreed big banks would generally not match the rates at banks such as ICBC and Bank of China, unless the borrower was realistically likely to be able to borrow from one of them.
That was not always possible because their operations tended to be focused.
ICBC is offering 5.59 percent for terms from 18 months out to five years.
Trough of interest-rate cycle already here?
Corelogic chief economist Kelvin Davidson said it was coming to a time when buyers would have to weigh up whether it was worth fixing for longer.
"When it became clear through July, August and September that interest rates were going to fall ... we saw a stampede, really, on to shorter rates, to the point where some people are sitting on floating, waiting for rates to continue to fall even though there is a premium for doing that.
"I wonder if there is a time next year, I don't know when it is, where that goes back the other way and there's a rush to longer rates as perhaps people think the falls seem to have stopped and longer rates have a bit more appeal."
ANZ economists said they expected more OCR cuts to come in 2025 but markets had already anticipated them, so the "trough" of the interest rate cycle might have already nearly been reached.
"While short-term fixed mortgage rates that tend to move more in step with the OCR (like six months and one-year) have scope to fall a little further, rates like the three-year, four-year and five-year may not fall further, especially with global long-term interest rates on the rise again.
"So, anyone who wants to try to lock in at the bottom may want to start thinking about how much longer they want to wait.
"It is likely that a big chunk of the peak-to-trough move is already behind us and falls from here could be slower.
"In fact, mortgage rates for longer tenures are projected to move a touch higher next year, reflecting the sharp increases in wholesale interest rates over recent months in the fallout of the US Presidential election."
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