Reductions to some fixed home loan rates may extend the move by borrowers to fix for longer given swirling uncertainties in the short term

BNZ has cut its longer term fixed home loan rates, effective today Thursday, February 26, following Friday's move lower by Westpac.

BNZ probably won't be the only mover, although since Westpac moved, wholesale interest rates have actually moved back up a bit. So it isn't a sure thing that others will necessarily follow.

Earlier in the week, ICBC moved its one year rate down to 4.39%, matching TSB who were already there with the lowest one year rate in the current market.

There is currently some unexpected uncertainty in the wholesale rates market environment. That comes from the unexpected stickiness in Australian inflation. Aussie inflation is high at 3.8% and the January update was expected to show signs of softness. But in the event it didn't.

And that has market pricing implications as investors reassess how the Reserve Bank of Australia (RBA) might react. So far, the RBA has called for 'patience'. But patience might wear thin quickly now because their consumer price inflation (CPI) rate has stuck above 3% for seven consecutive months now. In fact it has stuck at the 3.8% level since October.

A financial market that believes the RBA's policy isn't effective in quelling inflation back into their target rate of 2% to 3% is a recipe for bets on higher rates. And there will be inevitable collateral reactions in New Zealand wholesale rates if that happens.

And the Reserve Bank's (RBNZ's) stated target is to be at the mid-point of a 1% to 3% target range. For half a year our CPI inflation has been at the top of that rate band or above. And the monthly 'selected price indicators' are not signaling a shift lower yet either.

So for mortgage borrowers contemplating choosing a new fixed rate term, lowish long term rate options might look good, especially the a three year rate below 5%. (Negotiation could take it lower than 4.99%.) The premium for fixing for three years over one year is now less than 50 basis points.

Further afield than New Zealand or Australia, most other major economies seem to have inflation under control, like Japan, China, and the European Union. But the giant and influential American situation is full of uncertainty, not only around inflation (cost of living), but public debt levels. All bets are off if investors grow tired of US Treasury debt risks. There is no sign of that yet, but the forecasts for US federal debt levels look dire.

For the record, BNZ did not announce any matching changes to term deposit rates at this time.

To compare mortgage rate offers in a way that includes the application and account fees costs (or break fee costs if you need to do that), and applying the impact of a cashback/legal fee reimbursement, or other incentive, you can use our home loan comparison calculator. You can find it here. Or, for convenience, we have added it to the bottom of this article.

Negotiate. How flexible banks may be will depend on the strength of your financials.

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

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 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 February 26, 2026	%	%	%	%	%	%	%
ANZ	4.49	4.49	4.69	4.89	5.19	5.89	5.99
	4.59	4.59	4.75	4.95	5.19	5.55	5.69
	4.49	4.49	4.64	4.69	4.99 -0.11	5.19 -0.36	5.29 -0.40
	4.49	4.49		4.89	5.25	5.69	5.79
	4.49	4.49	4.69	4.89	4.99	5.19	5.29
Bank of China	4.38	4.48	4.48	4.58	4.88	5.28	5.28
China Construction Bank	4.79	4.49	4.49	4.54	4.90	5.10	5.20
Co-operative Bank	4.65	4.49	4.69	4.79	5.09	5.29	5.49
ICBC	4.69	4.39 -0.10	4.49	4.59	4.99	5.09	5.19
	4.69	4.49	4.69	4.89	5.15	5.55	5.69
	4.59	4.39 -0.10	4.75	4.89	5.15	5.55	5.69