Borrowers weigh fixed, variable and split loan options
The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has joined the chorus of industry voices calling for a rate cut when the Reserve Bank (RBNZ) delivers its next monetary policy decision.
“We believe there's a clear need for an interest rate cut to help ease cost of living pressures for New Zealand borrowers and to boost home loan affordability,” said FAMNZ managing director Peter White (pictured).
White said borrowers are weighing up whether to fix their mortgage or remain on a variable loan. “Many are electing to split their loan between the two as part fixed and part variable, and this can be a good option right now as the expectation is that rates will continue to trend downwards into 2026.”
One size doesn’t fit all
White stressed that mortgage solutions need to be tailored to customer needs.
“There is no ‘one size fits all’ when it comes to the best mortgage product,” he said. “Finance and mortgage advisers will base their advice on the specific needs of each individual customer. This varies from person to person depending on their circumstances.”
White pointed to self-employed borrowers as an example.
“What is in the best interests of one customer is different from that of another,” White said. “For example, those who are self-employed may not fit traditional bank lending criteria, so it’s important to discuss your situation with your adviser to obtain the loan that is most suitable.”
He also urged borrowers to consider non-bank options.
“While the major banks have many good products, borrowers should never think that they are the only source of lending,” White said.
“In fact, very often a non-bank lender can meet a customer’s needs for either a better rate or a more flexible loan depending on the requirement. Some of these lenders are only available through a mortgage adviser. A mortgage adviser will be able to provide the advice based on both the lending product and on your situation.”
Major banks, including ASB, have already trimmed mortgage rates in anticipation of the RBNZ’s move, giving borrowers more options to weigh as advisers guide them on the best mix of fixed, variable or non-bank products.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
