Best Home Loans NZ (2024) – Compare Rates & Find the Lowest

Finding the right home loan in New Zealand these days means sorting through a stack of special rates, cashback offers, and shifting official cash rate signals. With the Reserve Bank holding OCR at 5.50% and lenders advertising one-year fixed rates anywhere from 6.69% to 8.09% (Canstar, April 2024), the gap between the cheapest and most expensive option can cost hundreds of dollars per month.

Average fixed 1yr rate (RBNZ Oct 2023): 7.45% ·
Lowest advertised rate (as of Oct 2023): 6.89% BNZ ·
Maximum mortgage term: 30 years ·
Typical monthly payment on $400k @ 7%: ~$2,660 ·
Official Cash Rate (Oct 2023): 5.50% ·
Number of lenders compared on Canstar NZ: 48+

The table below compresses the key numbers every borrower needs to know.

Who has the best home loan rates in NZ?

Current lowest advertised rates from major banks

As of October 2023, the cheapest one-year fixed rate among large banks is BNZ’s Classic rate at 6.89%. Westpac follows at 6.99% and offers a $5,000 cashback for new loans above $250,000 (Westpac (bank)). ASB’s one-year special sits at 7.15%. But the range is wider when you include all lenders: Canstar’s April 2024 survey found one-year fixed rates from 6.69% to 8.09% across 48 lenders (Canstar (independent comparison platform)).

How to compare total cost including fees

Interest rates alone don’t tell the full picture. ASB directs customers to an independent calculator on interest.co.nz to compare total costs including fees (ASB Bank (one of NZ’s ‘big four’)). Always check application fees, annual fees, break fees, and whether a cashback offer offsets a slightly higher rate. Westpac’s $5,000 cashback, for example, effectively reduces the first year’s cost.

The implication: don’t anchor on the headline rate alone. A slightly higher rate with lower fees and a cashback can be cheaper over three years.

How much is the repayment on a $400000 mortgage NZ?

Repayment calculation at current rates

On a 30-year term at 7% fixed, your monthly repayment comes to approximately $2,660. Switch to a floating rate at 8% – common for those avoiding fixed terms – and the payment jumps to roughly $2,950 per month (RBNZ retail lending data).

The RBNZ’s mortgage calculator can run your exact scenario using current rate data (RBNZ (central bank)).

Factoring in interest rate changes

If rates drop to 5.05% (the weighted-average by December 2024), the monthly payment on $400k falls to about $2,160 – a saving of $500 per month. But if you fix for two years now at 7%, you won’t benefit until your next refix. This timing trade-off is central to every home loan decision.

Why this matters: locking in a long fixed term gives certainty but might mean missing out if rates fall sooner. The current gap between short and long fixed rates is narrow, so many borrowers are fixing for one year.

Will mortgage rates drop to 3% again?

Current OCR outlook and expert forecasts

The Reserve Bank held the OCR at 5.50% in October 2023 and most economists – including Westpac and ASB – expect it to remain there through much of 2024 (NZ Adviser (mortgage industry publication)). ANZ predicts cuts could begin as early as August 2024, but even then rates would only edge down, not collapse.

Historical rate context last 10 years

The 2-3% mortgage rates seen during 2020-2021 were a once-in-a-generation event triggered by pandemic emergency easing. The RBNZ’s weighted-average lending rate fell to 5.05% by December 2024 (RBNZ), still far above those pandemic lows. Most forecasters don’t see a return to 3% within five years.

The trade-off: waiting for 3% again is likely a losing gamble. Planning for rates between 5-7% for the next few years is realistic.

How to pay off a 400k mortgage in 5 years?

Accelerated repayment strategies

To clear $400k in five years at a 7% interest rate, you’d need monthly payments of roughly $8,800 – more than triple the standard 30-year payment. That’s achievable only with a high income (e.g., combined household income of $180k+) and aggressive budgeting.

Strategies that work for some Kiwi borrowers:

• Lump-sum contributions from bonuses, inheritance, or KiwiSaver withdrawal (up to $5,000 per person for first-home buyers, $10,000 for couples – New Zealand Government (housing authority))
• Switch to a flexible offset account to reduce daily interest
• Increase payment frequency to fortnightly – reduces interest faster
• Fix part of the loan at a lower rate and put extra into an offset floating account

Realistic income and lifestyle trade-offs

For most households, paying off a $400k loan in five years means sacrificing holidays, dining out, and possibly working extra jobs. It’s a path for high earners or those with significant windfalls. For everyone else, aiming for a 15-year term (payments ~$3,600/month) is more realistic while still saving on interest.

The verdict: paying off a $400k mortgage in five years is possible but extreme. For most Kiwi borrowers, a 15-year target with occasional lump-sum payments is a balanced approach.

What is a good interest rate in NZ right now?

Current market rate ranges

As of late 2024, a “good” one-year fixed rate falls between 6.69% and 7.45%. The RBNZ’s average new mortgage rate was 5.05% in December 2024 (RBNZ (central bank)), but that’s a weighted average including floating and shorter terms. For a standard one-year fix, anything below 6.9% is competitive.

Factors influencing what is ‘good’ for you

Your personal circumstances define “good”: if you have only a 5% deposit, you’ll likely be offered a higher rate than someone with 20% equity. The government’s First Home Loan programme can help with a lower deposit (New Zealand Government). Also consider whether cashback, low fees, or flexible offset features matter more than an extra 0.1% on the rate.

The takeaway: a good rate today is sub-7% for a one-year fix, but the real cost depends on fees, deposit size, and your ability to refinance. Shop around every time your fixed term ends.

Confirmed facts vs. what’s unclear

Quotes from experts

“The Official Cash Rate is expected to remain at 5.5% through 2024.”

— Westpac, via NZ Adviser

“For an average NZ home loan of around $370,000 on a 25-year term, the difference between the best and worst one-year fixed rates was about $336 per month.”

— Canstar (independent comparison platform)

Given the current rate environment, the best home loan in NZ isn’t just about the lowest advertised rate – it’s about total cost over your planned fix period, fees, and flexibility to refinance. For first-home buyers, the combination of a First Home Loan with a 5% deposit and a competitive rate from a bank like BNZ or Westpac (with cashback) can be a winning start. For those refixing, a one-year term keeps options open while rates trend down.

Best Bank in NZ 2026 – if you’re thinking beyond home loans, our guide to the best overall bank might help.

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Frequently asked questions