New Zealand Mortgage Rate Update: April 2025 Trends & Strategy

What’s Happening with Mortgage Rates in New Zealand? (April 2025 Update)

With economic changes accelerating, many homeowners are wondering: Should I fix my mortgage rate now? For how long? Are rates going up or down?  This article helps you break it down.

Where Mortgage Rates Stand Right Now

As of April 22, 2025, here are some of the most competitive fixed rates from major banks:

• 6-month fixed: 5.49% 
• 1-year fixed: 4.99% 
• 18-month fixed: 4.95% 
• 2-year fixed: 4.99% 

On April 9, the Reserve Bank of New Zealand (RBNZ) cut the OCR by 0.25%, bringing it to 3.5%. Initially, banks adjusted only their floating rates. But in the week that followed, some also began lowering short-term fixed rates.

What’s Driving the Change?

The rate environment was already softening—but one global event accelerated things: The U.S. announced new tariffs, adding uncertainty to global trade and financial markets. New Zealand is an export-reliant economy. A hit to export revenues can reduce employment, business investment, and GDP growth—prompting further interest rate cuts by the RBNZ.

Why Swap Rates Matter for Fixed Mortgages

Swap rates are market-based interest rates used by banks to price fixed loans. They’ve dropped sharply in recent days due to:

• Expectations of global slowdown
• Only 2% of NZ businesses expect to raise prices in the next quarter (lowest in decades)
• Higher import costs from U.S. tariffs are squeezing company margins and cash flow

While short-term inflation looks under control, long-term inflation risks remain. That’s why the Reserve Bank is proceeding cautiously.

What Should You Do as a Borrower?

There’s no one-size-fits-all answer—but here are a few common strategies:

• Choose 1-year fixed if you want flexibility and expect rates to fall further
• Choose 2-year fixed if you prefer certainty and your loan size is large
• Split your loan between 1 and 2 years to balance risk and predictability

The best option depends on your financial position, risk appetite, and long-term plans.

Final Thoughts

April 2025 is a dynamic time for mortgage decisions. Global events are unfolding quickly, and while swap rates are falling, fixed rates are still catching up. Now is a great time to review your home loan structure with a mortgage adviser. A small decision today could save you thousands over time.   Disclaimer: This article contains general information only and does not constitute personalised financial advice. Please consult a licensed mortgage adviser before making any loan decisions.