Scheduled maintenance is planned for June 13 at 4pm, during which time the site will be temporarily unavailable.
%20(12).png)
Home loan interest rates have been nudging up, and this raises the question of whether to fix for the "long or short term". There isn't one right answer. It really comes down to your plans, your cash flow, and how much certainty you want.
As at 11 September 2026, the Official Cash Rate has recently increased to 2.75%, and floating home loan rates have gone up with it. The Reserve Bank's commentary was a little more dovish than expected, which briefly pushed wholesale rates lower, although they are now back around where they were before the announcement.
At the time of writing, the major New Zealand banks' discounted fixed rates are currently around 4.75% to 4.80% for one year, 5.19% for two years, and 5.29% to 5.49% for three years.
Right now, the expectation is that rates will keep rising over the next 12 months. Of course, a lot can change in both the New Zealand and global economies, so there is still plenty of uncertainty. The sensible approach is to be prepared for the possibility that your home loan could cost more when your current rate expires.
Before you refix, have a think about what the next one to three years might look like. Could your household income change? Are you thinking about selling, renovating, buying another property, or needing a top-up? Will you have some spare cash available?
All of these things can affect how your loan is best set up, so let us know before you lock anything in.
Lower cost today: A one-year fixed rate may suit you if you want the lowest available fixed rate now and are happy to review things again sooner.
More certainty: Fixing for two or three years may cost a little more at the start, but it can make budgeting easier and give you some breathing room if rates keep rising.
Spread the risk: Splitting your loan across one-, two-, and three-year terms means it won't all roll onto a new rate at the same time. It is a straightforward way to soften the impact of rate movements either way.
A five-year fix can still make sense if long-term certainty really matters to you, or perhaps for a smaller portion of the loan. Just remember that five years is a long time. Life can change, and being locked in may give you less room to refinance or negotiate incentives during that period.
If you usually keep money in savings or expect to have some spare income, an offset or revolving credit facility on part of your loan could help reduce the interest you pay while keeping the money available for unexpected costs.
If having easy access to that money would be a little too tempting, increasing your repayments above the minimum can be a simpler way to get ahead. Knowing your options can be a smart move.
The best answer is not always "take the cheapest rate". It is about finding the right mix of cost, certainty, and flexibility for what is happening in your life.
If your loan is coming up for renewal, get in touch before you refix. We can talk through the options, look at a few different structures, and help you choose an approach that feels right for you.
Looking for Mortgage Advice?
Book a 15 -minute call with our team to find out how we can help you with your mortgage strategy.
Brendon.
Brendon Ojala (FSP119244) is a Financial Adviser with Velocity Financial (FSP95466). No financial decision should be taken based on the information in this blog alone. Please see our disclosure statement on our website.
About Brendon:
Hi, I'm Brendon, one of the owners and advisers at Velocity Financial. I have been giving advice on mortgages and insurances at Velocity for around 15 years, and it is great to be able to work with people to achieve their financial goals. Prior to giving money advice, I worked as a youth worker and managed teams for a not-for-profit organisation. I live with my wife and one of my sons (the other one only stays when he needs food) in Berhampore, and if I'm not talking revolving credit accounts, I can be found running the trails of Wellington.
Always get professional advice
The information shared in this post is meant to be general guide to support you on your journey. When making important decisions about your finances, we encourage you to seek independent financial advice first, tailored to your unique situation. As well as talking with a financial adviser, make sure you talk to your lawyer and accountant too – together they'll help you find the best solution for your specific situation. Our knowledgeable financial advisers are here to help. Check out our website for the details about our financial advisory services in our disclosures:
https://www.velocityfinancial.co.nz/disclosure-statement.