Six‑month specials tempt borrowers, but longer fixes keep climbing
New Zealand’s fixed-rate outlook has shifted again, with ASB and Kiwibank now fully in step with the other majors on longer terms – and that matters for Kiwi mortgage advisers helping clients choose between “cheap” six‑month fixes and much pricier two‑ to three‑year money.
Six-month specials trimmed, but one–to–three year rates climb
ASB has kicked off the week by trimming its six‑month fixed mortgage rate by 6bps to 4.59%, still above most main rivals but now level with Kiwibank for that term. Kiwibank’s six‑month rate is 4.49%, matching recent reductions from ANZ and BNZ, 1News and RNZ reported.
At the same time, both banks have lifted longer fixed terms. ASB has raised its one‑ to three‑year fixed home loans by 10 to 20 basis points, while Kiwibank has increased its two-, three-, four- and five‑year fixed terms by 10 or 20 basis points on both special and standard rates.
Interest.co.nz notes that for one‑year and 18‑month terms, Kiwibank’s +10bps move now gives it “the highest rates in the market for those terms,” with its two‑year rate “up +20 bps, to 4.95%” and three‑year “up +10 bps to 5.19%.”
ASB says the driver is a sharp move in funding markets.
“Longer term wholesale interest rates had risen by more than 50 basis points since the Reserve Bank’s November 2025 OCR announcement, increasing the cost of providing fixed lending,” ASB executive general manager for personal banking Adam Boyd said. The “changes reflect the reality of our higher wholesale interest rate environment.”
Depositors win as funding costs rise
While tougher for borrowers, savers are seeing better offers. ASB and Kiwibank have both raised term deposit rates across nine‑month to five‑year terms. ASB has lifted its two‑year term deposit by 35 basis points to 4%, and Kiwibank has increased its 24‑month TD to 4% as well, though interest.co.nz notes these moves mostly “bring them up to where their main rivals have already settled.”
ASB chief economist Nick Tuffley points to the repricing in swaps since the RBNZ’s last statement: “We’ve seen for two-year rates, a good 50 basis point increase in wholesale rates and nearly 60 for the 3 year… so to date, the moves we’ve seen with mortgage rates aren’t really keeping up with that yet.”
Tuffley's core message: “the period of really low interest rates, super low interest rates, has gone, but the market’s settling into a reality of the cash rate’s likely to be on hold for most of this year, but we’re past the lows now.”
What this means for Kiwi mortgage advisers
- Six‑month rates look sharp, but repricing at refix time is likely as two‑ and three‑year funding becomes more expensive
- Longer fixed terms across all majors have moved higher, with ASB and Kiwibank now among the most expensive for key investor and owner‑occupier horizons
- Term deposit improvement signals ongoing funding competition – a reminder that bank margin pressure is real and likely to keep medium‑term mortgage rates elevated
With the RBNZ’s next OCR decision due on 18 February, advisers should be actively stress‑testing refixes at higher two‑ and three‑year rates, discussing break‑even points on short vs longer fixes, and helping clients understand that, as Tuffley puts it, we are “past the lows now.”
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