Last year, as people refixed their home loans, the number of borrowers opting for short-term mortgage terms peaked. Higher floating rates saw a surge in popularity, too, as property owners banked on reduced rates in the near future.
However, now that we’ve passed the low point of the interest rate cycle, longer-term fixes of over a year are more popular: up from around 18% of new residential lending 12 months ago, to 29%.
So, if you’ve a mortgage, do you fix for longer now, or do you take a punt on a shorter-term rate, hoping for lower rates in the near future?
Of course, the final decision is up to you, and it must align with your budget and financial goals. However, it’s not a bad idea to do a couple of quick sums to see how the options stack up.
How long should I fix my mortgage for?
To work out the best option for you, you’ll need to calculate a break-even rate. This is the interest rate you would need to secure next time you refix to make opting for a rate now the cheaper option. Working out break-even rates can involve some tricky arithmetic, but to save you the effort, we’ve done the math for you.
Most of the big banks are offering very similar rates for those with 20% equity, and the rates in our table below are based on the average special home-loan rates offered by ANZ, ASB, BNZ, Kiwibank, SBS Bank, The Co-operative Bank, TSB and Westpac.
| Term | Current | In 6 mnths | In 1 yr | In 18 mnths | In 2 yrs | In 3 yrs | In 4 yrs |
| Floating | 5.71% | 3.77% | |||||
| 6 mnths | 4.58% | 4.90% | 5.71% | 5.94% | |||
| 1 yr | 4.74% | 5.30% | 5.82% | 5.92% | 6.03% | 6.65% | 6.59% |
| 18 mnths | 5.06% | 5.51% | 6.00% | ||||
| 2 yrs | 5.28% | 5.61% | 5.93% | 6.13% | 6.34% | 6.62% | |
| 3 yrs | 5.53% | 5.85% | 6.17% | 6.30% | 6.42% | ||
| 4 yrs | 5.81% | 6.05% | 6.27% | ||||
| 5 yrs | 5.97% |
Source: Canstar | Floating break-even rate assumes rate remains static. If it drops, the breakeven will increase; if it increases, the breakeven will reduce. Rates correct at 12/06/2026.
How to use the above table
Fixing for one year: do you fix at 4.74%, or
- Fix for 6 months at 4.58%, then for another 6 months at 4.90%
- Choose floating for 6 months at 5.71%, then fix for 6 months at 3.77%
Fixing for two years: do you fix at 5.28%, or
- Fix for 18 months at 5.06%, then for 6 months at 5.94%
- Fix for 1 year at 4.74%, then for another year at 5.82%
- Fix for 6 months at 4.58%, then for 18 months at 5.51%
Fixing for three years: do you fix at 5.53%, or
- Fix for two years at 5.28%, then for 1 year at 6.03%
- Fix for 18 months at 5.06%, then for another 18 months at 6.00%
- Fix for one year at 4.74%, then for two years at 5.93%
Fixing for four years: do you fix at 5.81%, or
- Fix for 3 years at 5.53%, then for 1 year at 6.65%
- Fix for 2 years at 5.28%, then for another 2 years at 6.34%
- Fix for 1 year at 4.74%, then for 3 years at 6.17%
Fixing for five years: do you fix at 5.97%, or
- Fix for 4 years at 5.81%, then for 1 year at 6.59%
- Fix for 3 years at 5.53%, then for 2 years at 6.62%
- Fix for 2 years at 5.28%, then for 3 years at 6.42%
- Fix for 1 years at 4.74%, then for 4 years at 6.27%
From the above numbers, you can see that longer-term rates, between two and five years, are quite attractive at the moment.
For while the RBNZ has indicated that it plans to lift the OCR over the next 12 months, these increases have already been factored into the banks’ longer term mortgage rates.
For more on what the major banks have to say on where rates are headed, check out our story In which direction are mortgage rates headed?
Lowest Mortgage Rates for Refinancing
Looking to refinance your mortgage? The table below displays some of the 1-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for home owners looking to refinance. This table is sorted by current interest rates (lowest to highest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.
Compare Lowest Home Loan Rates for Refinancing
About the author of this page
Bruce Pitchers is Canstar NZ’s Content Manager. An experienced finance reporter, he has three decades’ experience as a journalist and has worked for major media companies in Australia, the UK and NZ, including ACP, Are Media, Bauer Media Group, Fairfax, Pacific Magazines, News Corp and TVNZ. As a freelancer, he has worked for The Australian Financial Review, the NZ Financial Markets Authority and major banks and investment companies on both sides of the Tasman.
In his role at Canstar, he has been a regular commentator in the NZ media, including on the Driven, Stuff and One Roof websites, the NZ Herald, Radio NZ, and Newstalk ZB.
Away from Canstar, Bruce creates puzzles for magazines and newspapers, including Woman’s Day and New Idea. He is also the co-author of the murder-mystery book 5 Minute Murder.
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