After a quiet stretch, major lenders are competing again — sharper short-term fixed rates, cash-back incentives, and more flexible low-deposit options. If you’re buying your first home or refixing, this window can work in your favour.
Why banks are opening the taps
- Lower promotional rates: short terms priced more aggressively to win business.
- Cash-back offers: typically a small % of the loan for eligible new lending.
- Low-deposit lending: 10% deposits considered for strong files.
With approval volumes softening, lenders are keen to grow market share — which translates to faster turnarounds and sharper pricing for well-prepared borrowers.
What this means for first-home buyers
- Line up pre-approval early: it lets you negotiate quickly when the right property appears.
- Maximise borrowing power: tidy 90-day account conduct, trim unused card limits, and structure income correctly.
- Use KiwiSaver & grants wisely: combine savings, KiwiSaver withdrawal, and First Home Grant to reach 10% sooner.
A mortgage broker Tauranga can compare banks and non-banks and suggest a split structure (part fixed, part floating) so you can pivot as rates change.
Refinancing opportunities
Existing homeowners can benefit from the same competition:
- Refix short for flexibility, or refinance to a sharper term.
- Consolidate small higher-rate debts into one facility (only if the payoff plan stays short).
- Use savings from a lower rate to make extra principal payments and shorten the term.
Look beyond the headline rate
- Stress-test: model repayments +1–2% above today’s rate.
- Total cost: a lower payment with a longer term can cost more unless you top up principal.
- Fees & break costs: weigh true savings after any fees/cash-backs.
Tauranga example
A Bethlehem household refixed a $650k balance from 7.39% to a promotional 5.89% 1-year rate and received a modest cash-back. Monthly savings were ~${360}; they now apply half of that to extra principal, pulling the loan term in without tightening their lifestyle.
Three smart moves before competition heats up
- Check your fixed-rate expiry: if due within ~60 days, compare options now.
- Run a lending review: restructure splits/terms to match your cash-flow and risk.
- Get advice early: position your file before promos or policy settings change.
Bottom line
Banks are back in growth mode. With sharper pricing and more flexible deposits, well-prepared buyers and refinancers can save thousands over the term. If you’d like clear options tailored to your situation, I’m happy to help.
Book a free chat to compare rates, check eligibility for cash-backs, or explore a refinance that fits your goals.
Best Mortgages — Operated by Ewald Biesenbach (FSP 320426) under The Best Limited (FSP 724451 – NZBN 9429043352067). Licensed under the Financial Services Legislation Act 2019.Which banks recently cut short-term fixed mortgage rates in New Zealand?
Most major banks — including ANZ, ASB, and BNZ — have reduced 1-year and 18-month fixed rates to attract new borrowers. These short-term specials signal that banks are competing again for mortgage market share. A mortgage broker Tauranga can help compare which lender’s criteria and cash-backs fit your situation.
How do low-deposit lending rules work in New Zealand?
Banks can lend to some borrowers with less than a 20 % deposit under their LVR (loan-to-value ratio) allowance. These approvals depend on strong income, clean credit, and property type. Non-bank lenders may allow even lower deposits but at slightly higher rates. Getting pre-approval early shows what’s achievable in your price range.
What are the pros and cons of 1-year vs 2-year fixed mortgage terms?
A 1-year fixed term offers flexibility to refix sooner if rates fall, while a 2-year term provides stability against potential increases. The right choice depends on your risk tolerance and budget. Many Tauranga homeowners are choosing to split their loans between both to balance certainty and flexibility.
How can refinancing help reduce my mortgage costs in 2025?
Refinancing to a lower fixed rate or changing loan structure can cut monthly payments or shorten your term. Some banks offer 0.7 %–1 % cash-backs to attract refinancers. Always compare true savings after fees and discuss options with your broker before switching.
