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Mortgages

Mortgage Rates Daily Commentary
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Seven year fixed rate attracts attention

The general trend in the cost of fixed rate loans continues to be upwards and is likely to remain so as financial markets become increasingly convinced that the Reserve Bank will increase the Official Cash Rate next month.

Wednesday, February 14th 2007, 6:48AM

by Maria Scott

Brendan O’Donovan, chief economist at Westpac says the market now thinks there is an 87% chance of a rate hike in March. He expects retails sales figures due for release later this week to strengthen the case for action by the Reserve Bank.

Several banks have raised their fixed rates over the past week including National Bank, Bank Direct and TSB. There have been some reductions over the past month, but these have been isolated moves.

BNZ has attracted attention by promoting a seven year fixed rate at 7.77%. One competitor has described this as “madness” because borrowers will be locking themselves into a rate that may be expensive well before the term is up.

Tony Alexander, BNZ’s chief economist argues that this is the cheapest rate on offer and attractive to borrowers concerned about cash flow. At 7.77% the rate is at its average of the last five years.

O’Donovan says that because it is close to the long term average it does not look like particularly cheap funding.

As the outlook for loan rates hardens borrowers who need to refinance may be attracted to the idea of hedging their bets by splitting their mortgages between a range of fixed terms.

The disadvantage may be that borrowers reduce their bargaining power with lenders by seeking finance on several smaller loans rather than one large parcel of debt.

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.44 - - -
AIA - Go Home Loans 6.54 4.89 4.95 5.09
ANZ 6.49 5.55 5.55 5.69
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 4.95 4.95 5.09
ASB Bank 6.44 4.89 4.95 5.09
ASB Better Homes Top Up - - - 1.00
Avanti Finance - Near Prime ▼6.90 - - -
Avanti Finance - Specialised 8.34 - - -
Basecorp Finance 7.25 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 5.99 5.69 5.69
BNZ - Mortgage One 6.54 - - -
BNZ - Rapid Repay 6.54 - - -
BNZ - Std 6.44 4.89 4.95 5.09
BNZ - TotalMoney 6.54 - - -
CFML 321 Loans 4.99 - - -
CFML Home Loans 6.70 - - -
CFML Prime Loans 7.20 - - -
CFML Standard Loans 7.99 - - -
China Construction Bank 6.44 4.85 4.95 4.95
China Construction Bank Special 6.44 5.85 5.95 5.95
Lender Flt 1yr 2yr 3yr
Co-operative Bank - First Home Special - 4.85 - -
Co-operative Bank - Owner Occ 5.95 4.95 4.99 5.25
Co-operative Bank - Standard 5.95 5.45 5.49 5.75
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.29 5.19 -
First Credit Union Standard 6.94 5.79 5.49 -
Heartland Bank - Online 5.99 5.89 - -
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 7.45 5.90 5.80 -
ICBC 6.50 4.85 4.95 5.05
Kainga Ora 6.44 4.89 4.95 5.09
Lender Flt 1yr 2yr 3yr
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.35 5.79 5.85 ▼5.95
Kiwibank - Offset 6.35 - - -
Kiwibank Special - 4.89 4.95 ▼5.15
Liberty 6.90 6.80 6.50 6.45
Nelson Building Society 6.94 4.99 4.93 -
Pepper Money Near Prime 6.85 - - -
Pepper Money Prime 6.29 - - -
Pepper Money Specialist 8.30 - - -
SBS Bank 6.49 5.55 5.55 5.75
SBS Bank Special - 4.95 4.95 5.15
Lender Flt 1yr 2yr 3yr
SBS Construction lending for FHB 3.94 - - -
SBS FirstHome Combo - 4.29 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity ▼8.64 - - -
TSB Bank 7.19 ▼5.69 5.75 6.09
TSB Special 6.39 ▼4.89 4.95 5.29
Unity First Home Buyer special - 4.29 - -
Unity Special 6.64 4.99 4.99 -
Unity Standard 6.64 5.79 5.79 -
Wairarapa Building Society 6.75 5.09 4.95 -
Westpac 6.59 5.49 5.55 5.59
Lender Flt 1yr 2yr 3yr
Westpac Choices Everyday 6.69 - - -
Westpac Offset 6.59 - - -
Westpac Special - 4.89 4.95 4.99
Median 6.56 4.99 4.99 5.15

Last updated: 30 June 2025 8:16am

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