With so many mortgage lenders, interest rates and terms to choose from, finding the best solution for your circumstances can be hard work. Whether you’re about to buy a home or are exploring refinancing options for a property you already own, you’ll find our rates page incredibly useful. It shows the lowest interest rates available each day for all six interest rate terms – the floating and 1 to 5-year fixed rates. It also lets you sort and compare all the latest mortgage rates from bank and non-bank lenders.
However, there’s more to choosing the best rate for you than simply picking the lowest one. Before you commit to a new lender and/or rate, it’s important to get professional advice about the best mortgage structure for your situation and goals.
This article is designed to help you get started on choosing the best interest rate for your circumstances. It also has examples of how you can use our daily top six interest rates widget and sortable mortgage rates table to quickly find and compare the rates you’re interested in.
Is choosing the lowest mortgage rate the best strategy?
The answer to this question depends on your circumstances and appetite for risk.
Looking ahead to when a rate ends
While a lower one-year rate might mean you pay less for the first year, it all depends on what interest rates are like when your one-year rate ends. If the new one-year rate is only slightly higher, it may still work out better overall than taking the higher two-year rate initially. So estimating what rates might be like when any fixed rate term ends is just as important as looking at initial rates to begin with.
Understanding your risk appetite
Another very important factor is your appetite for risk or your ability to absorb a sudden increase in interest rate, should it happen. Many people are happy to pay the extra for a longer term rate, so they can budget with confidence and not lie awake at night worrying about news reports of rising rates.
Making lump sum repayments
A third factor is being able to repay a lump sum if you come into some money, which could happen if you sell an asset, receive an inheritance or get a pay rise. If you make a lump sum repayment while on a fixed rate, you’ll usually have to pay an early repayment penalty fee. So if you’re expecting to repay a lump sum at some point, it helps to have your fixed rate end at about the same time. Then you can repay the lump sum while your mortgage is briefly on floating before you re-fix.
Splitting to reduce risk
To avoid getting caught with their entire mortgage on an unfavourable fixed rate term, many people split their borrowing across more than one rate. They might also keep some on floating, to allow lump sum repayments without penalties. Splitting across more than one fixed rate term reduces the risk of having to re-fix everything at once while rates are high.
Getting professional advice
Finally, it pays to get professional advice when choosing the best rate for you and your circumstances. That’s why many people work with an experienced mortgage adviser (broker). They usually cost you nothing because they’re paid a commission by the lender you eventually choose to borrow from.
Can mortgage advisers get lower rates than those advertised?
The short answer is ‘yes they often can’, but you might be able to as well. If you have a straightforward mortgage in mind, a good financial history, a strong income and a substantial deposit, then lenders will be keen to get your business. If you have the time to shop around, find the best deals for your needs, submit your loan application information and haggle, then there’s every chance you could get a lower rate than those advertised – just like a mortgage adviser can.
But given you normally don’t pay anything to use a mortgage adviser, why wouldn’t you let them do the leg work for you? Where a good mortgage adviser can really save you money is helping you choose the best loan structure for your current situation and future goals. Also, if your deposit or income is a bit low for the properties you have in mind, an experienced broker can help you find the best lenders for your situation. They can also help you prepare for an application that gives you the best chance of a positive outcome. They’ll even submit it on your behalf using their contact at the lender, which can mean getting an answer sooner.
Not all brokers deal with all the main lenders, so be sure to ask. You can always use our handy rates table to find the best advertised deals and check your broker knows about them.
To save you time, we have a free service that connects you to a top performing mortgage adviser (broker).
How to find the best mortgage interest rate on any day
Whether you’re interested in floating or fixed, finding the lowest interest rate amongst all the options can take a while. To make this quick and easy, we’ve developed a clever tool that shows the best interest rate every day for each option, as well as which lender is offering it.
You can view today’s top six rates to:
- Quickly find today’s lowest mortgage rate for each term
- Compare the best rates with what your current lender is offering
- Monitor the best interest rates on a regular basis to see which lenders are consistently represented
How to quickly compare all mortgage interest rates
Our sortable table of current mortgage interest rates makes it easy to compare different lenders. It also shows the various rates of a particular lender or type of lender. Here’s how it works.
There are four tabs across the top, so you can choose to see the rates for all lenders, the five bank options that aren’t New Zealand owned, the five that are, and the five main mortgage lenders that aren’t registered banks.
Example 1 – Find the lowest floating rates offered by any of the lenders
- Click the Lenders tab – the tab title shows in purple
- Click the Floating column heading – the heading is highlighted and first shows an upward arrow, indicating the lenders are sorted by their floating rates from lowest to highest
Example 2 – Find the lowest two-year fixed rate offered by New Zealand owned banks
- Click the Kiwi Owned Banks tab – the tab title shows in purple
- Click the 2 Years column heading – the heading is highlighted and first shows an upward arrow indicating the Kiwi-owned bank lenders are sorted by their two-year rates from lowest to highest
Example 3 – See how your current lender compares for the one-year rate
- Click the Lenders tab – the tab title shows in purple
- Click the 1 Year column heading – the heading is highlighted and first shows an upward arrow, indicating the lenders are sorted by their one-year rates from lowest to highest
- Scroll down to your current bank’s row to see where they rank, hopefully near the top
TIP: If you only want to compare your lender with others of the same type, first click the tab for that type of lender, then click the column heading for the term you want to compare them by.
How to see the effect of different interest rates on your mortgage repayments
Having found an interest rate you like, our mortgage repayments calculator makes it easy to see what your regular repayments will be. This can help you decide whether it’s worth changing lenders to get a slightly lower rate. The calculator also makes it easy to compare how much interest you’ll pay over the life of the loan.
For helpful tips on using the calculator see our article How do I calculate my mortgage repayments.
To learn more
Understanding what causes interest rates to go up and down can be helpful when choosing your best interest rate. If you’re refixing your mortgage soon and would like to know more about what affects rates, see our article: Refixing your mortgage soon? Here’s what’s going on with interest rates.
