Three- to five-year home loan specials reduced
Kiwibank has announced reductions across its long-term fixed mortgage rates, trimming its three-, four- and five-year special rates for borrowers with more than 20% equity. The cuts take effect from Monday.
The revised special rates are:
- Three-year fix: 5.35% (down from 5.58%)
- Four-year fix: 5.59% (down from 5.79%)
- Five-year fix: 5.79% (down from 5.89%)
Standard rates for the same terms will be 6.15%, 6.39%, and 6.59%, respectively, RNZ and interest.co.nz reported.
Market caution limits broader movement
According to interest.co.nz, the modest changes reflect a subdued market. Most banks are maintaining a “wait and see” stance, reacting cautiously to global economic signals and stabilised wholesale interest rates.
While long-end wholesale rates are showing slight shifts—allowing room for reductions in longer-term offers—most retail banks are sticking close to their competitors’ rates.
Kiwibank’s latest move aligns it with other leading lenders.
Long-term fixes may not drop much gurther
Last week, Chris Tennent-Brown, ASB senior economist, warned that borrowers shouldn’t expect significant declines in long-term mortgage rates going forward, RNZ reported.
“While the official cash rate will probably continue to drop through 2025,” he said, “the Reserve Bank was nearing the end of the easing cycle,” Tennent-Brown said.
He noted that floating and six-month rates may fall in both the short and long term, while one-year rates could remain flat or fall slightly in the near term. However, “rates for two, three and five years were likely to be flat in the short term but could be higher in the longer-term.”
Tennent-Brown added: “For some time people would have been better off to fix than to float while they waited for rates to drop.”
Outlook: May’s Reserve Bank meeting may shift the market
The next major catalyst for retail rate changes will likely be the Reserve Bank’s monetary policy statement on May 28. Until then, further rate changes are expected to be limited and mostly tied to competitive positioning.
Borrowers are encouraged to continue negotiating for the best deal, as flexibility will largely depend on individual financial strength.
interest.co.nz offers an up-to-date snapshot of the lowest fixed-term mortgage rates currently advertised by major retail banks.
See Kiwibank rate change news on RNZ and interest.co.nz.
