Borrowers rush to lock one-year fixed terms
New Zealand’s first-home buyers are firmly back in the driver’s seat, according to the October 2025 mortgages.co.nz & Tony Alexander Mortgage Advisers Survey.
The latest data, drawn from 58 adviser responses, shows a clear lift in lending activity, improving bank appetite to lend, and a strong preference for one-year fixed terms — trends now reinforced by falling mortgage rates.
Economist Tony Alexander (pictured) said the October results reflect three key themes shaping the market:
- First-home buyers continuing to take advantage of the weak housing market.
- Borrowers strongly prefer to fix just one year rather than get the certainty of a slightly higher rate for a longer period of time.
- Banks are adjusting their remuneration systems for mortgage brokers and this is causing some angst.
First-home buyers lead resurgence
A net 33% of mortgage advisers reported seeing more first-home buyers seeking advice — up from 19% in September and just 8% in August.
Brokers said many are capitalising on greater bank flexibility, lower rates, and less buyer competition.
“Many first-home buyers are taking advantage of the current market which involves things such as increased bank willingness to lend, low interest rates, little competition from other buyers, and a good number of listings,” Alexander said.
Lending conditions for new buyers have eased modestly, with banks showing more willingness to work with clients who have solid savings records or stable employment.
Comments from advisers included:
- “Harder to get loan for over 80% LVR.”
- “Genuine savings, deposit, less rigid on bank statement spending in recent months.”
- “More scrutiny of employment stability… probably a sign of the wider labour market.”
Investor activity rises but remains muted
Investor enquiry lifted modestly, with a net 14% of brokers seeing more investors looking to buy — up from 2% last month. However, most noted ongoing caution amid higher ownership costs and limited rental growth.
“Although financing costs are low and still falling, investors face increases in other important costs including council taxes, maintenance, and insurance,” the survey said.
Banks remain selective with investment lending, with brokers reporting tighter scrutiny of multi-unit dwellings and ongoing debt-to-income (DTI) impacts.
Lenders more open to new borrowing
A net 33% of advisers said banks are now more willing to advance funds, matching September’s reading and marking the highest since March.
“Credit is available from lenders – telling us that the missing element is mainly a lack of finance demand overall,” Alexander said.
ASB’s latest Home Loan Rate Report reinforces this trend, noting that fixed mortgage rates between one- and two-year terms have fallen by up to 3% from their 2022–23 peaks. Senior Economist Chris Tennent-Brown said downward pressure on mortgages continues, with RBNZ’s official cash rate (OCR) now at 2.5% and forecast to ease again to 2.25% in November.
Borrowers overwhelmingly fix for one year
Eighty-two per cent of mortgage advisers reported that borrowers prefer to fix for one year or less, compared to just 6% for two-year terms.
“The proportion of brokers noting one year is the preferred term dipped early this year but has since recovered,” Alexander said.
ASB echoed this sentiment, saying that shorter terms may edge slightly lower over 2025, while longer fixed terms are likely to stay near current levels or rise modestly if inflation pressures persist.
Refinancing steady as competition heats up
A net 17% of advisers reported more refinancing enquiries, down from 27% last month.
While refinancing demand has plateaued, competition among banks remains intense, with many lenders still offering switching incentives to attract new borrowers.
Outlook: Borrowers balance flexibility and certainty
The combined findings from Tony Alexander’s broker survey and ASB’s Home Loan Rate Report point to a more confident yet cautious borrowing environment.
As mortgage rates stabilise near current levels — in a range still higher than pre-COVID lows — brokers are guiding clients toward personalised strategies that balance cost, flexibility, and rate certainty.
Alexander said the near-term market remains dominated by first-home buyers, while Tennent-Brown added that borrowers should “be aware of volatility and avoid trying to time the market perfectly.”
“Borrowers need to balance their needs for flexibility, repayment timeframes, the cost of floating vs. fixing, and other personal needs whilst trying to minimise the cost of borrowing over the entire period of a loan,” Tennent-Brown said.
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