Lower home loan rate offer changes are in a quiet phase and the background funding environment isn't opening many opportunities for banks to go much lower, meaning the next circuit breaker is hard to see

The last major fixed rate home loan change was from BNZ and Westpac on Tuesday, February 25. It has been nine days since, and rate changes have been quiet over this period.

In the background, wholesale rates are moving very little at the one and two year end of the swap curve. There is a minor easing, but from January 6 to March 6 the one year swap rate is only down 14 basis points (bps), and the two year swap rate is actually up 4 bps.

These are not moves banks could use to fund home loan rate cuts. As we have noted before, it is the tolerance of savers for matching rate cuts to savings and term deposit rates that have allowed the 2025 home loan rate reductions we have had. And that in turn is why observers think over the next few months, even past the next expected Official Cash Rate cut on April 9, there are not likely to be large movements and we may be at or near lows for mortgages in this cycle.

A quick check of benchmark NZ Government bond rates also shows little net change so far in 2025.

If home buying picks up, banks will need savers funding more, and the scramble for that will put a harder floor under current carded rates.

As has been noted elsewhere, there is a huge flood of mortgage refinance activity coming, in fact is underway. Because borrowers have a penchant for trying to game the home loan rate situation (probably egged on by mortgage brokers), the duration of fixed terms for home loans is now historically short. Dangerously so for many borrowers, many of who have even gone on [high] floating rates, gambling that future fixed rates will be lower. But it is a gamble.

The high refi activity levels will mean banks who win more market share with low offer rates, probably have to offer better term deposit rates to keep their non-market funding levels in line. The effect of this also puts a floor on how low mortgage rates can go.

That has left the current mortgage rate cards settled currently like this.

And this shows that the most competitive challenger banks offer a 10 bps to 15 bps rate advantage over the best (lowest) main bank carded rates, at this time.

Also coming into play are non-rate incentives. We have set these out on our regular tracking page, here. But be aware that in most cases you will be faced with a choice of a rate discount below card, or a non-rate incentive. Not both (unless you have pristine financials).

The reader-reported mortgage rates are showing less of an advantage now, but please record them if you have them. We need you to record them in the comment section below, which helps us stay on top of this fast-changing corner of the home loan rates market.

And still negotiate. How flexible they may be will depend on the strength of your financials.

One useful way to make sense of the changed home loan rates is to use our full-function mortgage calculator which is below.

And if you already have a fixed term mortgage that is not up for renewal at this time, our break fee calculator may help you assess your options. Break fees will be minimal in a rising market. But they become important in a falling market, like now.

Here is the updated snapshot of the lowest advertised fixed-term mortgage rates on offer from the key retail banks at the moment.

Fixed, below 80% LVR	6 mths	1 yr	18 mth	2 yrs	3 yrs	4 yrs	5 yrs
as at March 6, 2025	%	%	%	%	%	%	%
ANZ	5.89	5.29	5.19	4.99	5.29	5.99	5.99
current reader-reported rates
	5.89	5.25	5.19	4.99	5.35	5.79	5.79
current reader-reported rates
	5.79	5.29	5.19	4.99	5.29	5.69	5.79
current reader-reported rates
	5.79	5.19		5.19	5.59	5.79	5.89
current reader-reported rates
	5.89	5.29	5.19	4.99	5.39	5.39	5.39
current reader-reported rates
Bank of China	5.65	5.25	4.99	5.15	5.15	5.35	5.35
China Construction Bank	5.89	5.29	5.19	4.99	5.29	5.99	5.99
Co-operative Bank (*=FHB only)	5.69	5.19*	5.29	5.19	5.49	5.79	5.89
Heartland Bank		5.25	5.19	5.19	5.35
ICBC	5.89	5.05	5.19	4.99	5.39	5.49	5.49
	5.95	5.39	5.25	5.29	5.35	5.69	5.69
	5.89	5.19	5.49	4.99	5.39	5.79	5.89