How to save thousands off your New Zealand home loan

While talk of unaffordable house prices dominate New Zealand news headlines, many fixed-term home loan rates have been put on ice over the past year, Canstar research shows.

Canstar has researched and rated 63 home loan products across 10 providers, as part of its annual home loan star ratings. But, for the first time this year, Canstar has also announced a Bank of the Year – Home Loans, with ASB winning the inaugural award.

The Official Cash Rate (OCR) is not the only factor for providers setting home loan rates but, in New Zealand’s case, shorter fixed-term rates have held steady – or even dropped – over the past year, mirroring the cash rate.

Compare home loans with Canstar

Throughout 2017, New Zealand’s OCR has stayed put at the record low of 1.75%. The last time the Reserve Bank moved the cash rate was 10 November 2016, when it dropped the rate from 2.0% to 1.75%.

What happened to home loan rates in New Zealand over the past year?

Over the past year, many home loan rates Canstar measures have not budged either and some have even dipped slightly. Rates have been compared as at 15 March 2017 and 15 March 2018 for specific loan terms as per the Methodology Document, according to the database on

In the case of one-year fixed rates for residential homeowners, the minimum interest rate has decreased from 4.39% to 4.30%, the maximum rate has held steady at 4.99% and the average rate has dropped from, 4.69% to 4.60%.

Want more finance tips?

Save money by researching home loan rates
Sign up to receive more news like this straight to your inbox.

By subscribing you agree to the Canstar Privacy Policy

On the surface this might not sound like significant changes, but when you’re talking about more than ten thousand dollars over the life of the loan, it is much more than pocket change.

In fact, there is a $35.34 difference a month and $424.03 difference a year if you compare the average rate of a one-year fixed home loan for a house in Auckland in 2017 compared with 2018. Rates have been calculated based on a home loan of 25 years, at Auckland’s median house price of as at 14 March 2018 and with a 20% deposit of $171,600.

How can I save money on my home loan?

Home loan rates are not in set in stone and even a small change can make a significant difference to repayments. The good news is that you as a borrower have some control over the process. You can regularly check the market, via Canstar’s website, to see whether there is a better deal available, or a chance to negotiate a better rate with your current provider.

For example, not only do Canstar’s comparisons show there are significant differences year on year, but also between the maximum and minimum rates currently available on the market.

So, what does all this mean for New Zealanders and their home loans? Comparison is the key – not only when you sign up to a home loan for the first time, but also even after you signed up. There are options to either switch provider, or to negotiate a better deal with your current provider!

Take a closer look at how fixed home loan rates stack up, according to Canstar’s database:

Minimum Maximum Average
2017 2018 Difference 2017 2018 Difference 2017 2018 Difference
1 Year Fixed Investment 4.39% 4.30% -0.09% 5.09% 4.99% -0.10% 4.73% 4.65% -0.08%
Residential 4.39% 4.30% -0.09% 4.99% 4.99% No Change 4.69% 4.60% -0.09%
2 Year Fixed Investment 4.75% 4.39% -0.36% 5.35% 5.29% -0.06% 4.99% 4.86% -0.13%
Residential 4.75% 4.39% -0.36% 5.29% 5.29% No Change 4.94% 4.82% -0.11%
3 Year Fixed Investment 5.09% 4.89% -0.20% 5.75% 5.59% -0.16% 5.35% 5.19% -0.16%
Residential 5.09% 4.89% -0.20% 5.49% 5.59% 0.10% 5.30% 5.15% -0.14%
5 Year Fixed Investment 5.69% 5.55% -0.14% 6.35% 6.09% -0.26% 5.93% 5.83% -0.10%
Residential 5.49% 5.55% 0.06% 6.09% 6.09% No Change 5.86% 5.79% -0.06%

Data as at 15/03/2017 and 15/03/2018 for specific loan terms as per the Methodology Document, according to products on

Home loan rates are a key factor to consider when deciding on a home loan provider.

By regularly comparing home loan providers and products, you can keep an eye on the market and see whether it is worth your while negotiating a lower rate. You might not even need to switch provider.

To get a clearer overall picture of the home loan market, check out Canstar’s latest home loan ratings report.

Enjoy reading this article?

Sign up to receive more news like this straight to your inbox.

By subscribing you agree to the Canstar Privacy Policy

Share this article