The spring home selling season has started strongly with low numbers of houses available for sale and stiff competition. Prices are rising in many markets.
Enabling higher bidding are the unusually low mortgage rates on offer at present. Lower interest rates means lower weekly mortgage payments and this enables borrowers to think they can take on a bigger loan. Use our handy mortgage calculator to work out the numbers in your case.
On Monday morning, ASB, BankDirect and Sovereign all lowered their 2 year fixed rate, claiming the most competitive position for this term at 5.25%, a drop of 20 bps. BNZ then followed with a market-leading cut to its 18 mth Classic rate.
Borrowers are also encouraged by a number of lenders who will lend with low deposit (equity) requirements.
Affordability, as measured by the monthly Roost home loan affordability indexes, show a fairly stable situation even if in a number of key markets it is fairly tough. In other markets, affordability is much easier. In most markets with two incomes, household affordability is reasonably straightforward for a median or first-quartile house.
Real estate agents and mortgage brokers report that first home buyers are active in the markets at present.
Adding to 'confidence' is the RBNZ who have indicated that rates will stay low for a long time yet. And the Reserve Bank does not look like it will impose LVR limits any time soon to quell house price inflation.
Who has the lowest home loan interest rates? Well it depends on the term you are seeking.
Here is a review of the lowest published offer rates by banks today.
| Term | Institution | % rate p.a. |
| Variable | Kiwibank | 5.65% |
| SBS / HBS | 5.65% | |
| 6 months | HSBC Premier | 4.85% |
| 1 year | ANZ | 4.95% |
| 15 months | TSB | 4.95% |
| 18 months | BNZ Classic | 5.25% |
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| 2 years | ASB | 5.25% |
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| 3 years | SBS / HBS | 5.65% |
| 4 years | SBS / HBS | 5.99% |
| Westpac | 5.99% | |
| 5 years | SBS / HBS | 5.99% |
| Westpac | 5.99% |
Remember, you should always negotiate the rate. Your ability to win a discount from these rates will depend on the equity you have in your house (or the size of your deposit), the strength and reliability of your income, and other key factors.
It is quite conceivable that banks not in the above list, eg: BNZ or The Cooperative Bank may offer you the best deal in your case, so don't ignore them.
If you are self employed and find proof of income difficult, non-bank lenders may have arrangements that could work for you. Check those institutions listed on our mortgage rate page.
You can find up-to-date rates from all lenders on our mortgage page here »
(Updated with cut in ASB's 2 year fixed rate, BNZ reintroduces Classic 18 mth fixed rate.)
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Mortgage choices involve making a significant financial decision so it often pays to get professional advice. A Roost mortgage broker can be contacted by following this link »
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