Home owners can now fix their mortgage rate for below five percent, following further cuts to mortgage rates by the major banks following cuts last month.

Latest fixed rates:

  • SBS/HBS Bank: 4.85% over 18 months.
  • Westpac: 4.89% over 18 months.
  • ANZ: 4.89% over 1 year.
  • ASB: 4.89% over 1 year.
  • BNZ: 4.99% over 2 years.
  • Kiwibank: 4.89% over 1 year.

Banks are able to pass savings on because, along with cuts to the cash rage, they are paying lower rates to borrow the money from the international market.

Floating rates are higher than floating rates, but a number of the banks' chief economists are predicting that those rates might also come down further.

Westpac senior market strategist Imre Speizer expected New Zealand's cash rate to be cut  further by the end of the year. 

While it was possible the two year rates could come down he doubted that would be the case for longer term five year rates. Speizer said was because five year fixed rates were also linked to US interest rates, which expected to rise from September.

Weigh up your particular circumstances before deciding whether to fix for a longer time now or gamble on the rates coming down further, and fix for a shorter time.  

BNZ chief economist Tony Alexander said his advice to consumers was that any three year rate under 5 per cent or any five year rate under 5.5 per cent was a good deal.

Source: NZ Herald