Home Loan Rate Report: Mortgage rates drop as RBNZ pulls out the stops

  • Mortgage interest rates appeared to have hit their lows in late 2019.  However, the RBNZ’s massive response to the COVID-19 situation has seen mortgages drop to fresh lows over recent months.
  • Our forecasts suggest fixing and then rolling shorter term (1- and 2-year) mortgages terms is likely to be the cheapest option over a 5-year time horizon.
  • We expect mortgage rates to stay low for several years.  Nonetheless, borrowers should still plan to deal with higher interest rate costs as fixed terms mature in the future, rather than budget on rates remaining this low indefinitely.

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Chris Tennent-Brown

ASB Wealth Senior Economist

Chris has worked as an economist for ASB and Commonwealth Bank of Australia in Sydney since 2005. His work has involved monitoring and forecasting trends in the New Zealand economy, with a focus on drawing implications for financial markets and investments. Chris is passionate about savings issues, and much of his current work is focussed on broadening peoples understanding of investments. Chris obtained a Bachelor of Commerce at Auckland University, majoring in Economics, and prior to joining ASB worked in the funds management industry for Bankers Trust and BT Funds Management. With over 20 years' experience in finance, Chris has also spent several years farming, and was a New Zealand representative cyclist. When not at work, Chris likes to travel, cycle, and spend time with his family and numerous pets.

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