First home buyers

PHOTO: Good news for Kiwi homeowners and first-home buyers. FILE

💰 Good news for Kiwi homeowners and first-home buyers — mortgage repayments are finally easing, with the average borrower now saving around $270 a month thanks to falling interest rates.

📉 Interest Rates Falling Across New Zealand

BNZ Chief Economist Mike Jones confirmed that the average mortgage rate paid in June was 5.66%, down from a cycle peak of 6.39%.

At the peak, the average new first-home buyer mortgage of $575,000 cost around $3,593 a month ($829 a week).
Now, at 5.66%, that figure drops to $3,323 a month ($767 a week).

👉 That’s a saving of $270 every month for the typical New Zealand home loan borrower.

Jones forecasts the average rate could drop to 5% by the end of 2025, offering further relief to mortgage holders.

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🏠 What This Means for the Housing Market

  • $135 billion worth of mortgages will be refixed over the next six months (41% of all fixed loans).

  • Borrowers are shifting away from ultra-short refixes, spreading risk into 1–2 year terms.

  • The Reserve Bank OCR is tipped to fall to 2.5%, keeping the pressure off borrowers.

📊 According to Jones, Kiwi households are now more strategic:

“Borrowers appear much more inclined to absorb upfront costs to benefit long-term as we move through this interest rate cycle.”

🔑 Key Takeaways for Homeowners

✔️ First-home buyers: Lower repayments mean more affordability — a potential boost for those entering the property market.
✔️ Investors: Cheaper money could see renewed activity in the housing market.
✔️ Existing borrowers: Relief is here, but decisions on fixing terms remain crucial as rates continue to adjust.

📌 Expert Outlook

Jones cautioned that while rates are falling, borrowers should not expect a rush to lock in long-term deals:

  • The RBNZ still holds a downward bias on rates.

  • The economy remains weak.

  • Risk of rate hikes is a long way off.

“Borrowers have time up their sleeve,” Jones said, suggesting many will continue to opt for short-to-medium term fixes.

🚨 Bottom Line

New Zealand borrowers are finally getting some relief in the housing market after years of pain from soaring interest rates.

📉 With repayments dropping, real estate news analysts expect this could boost confidence in the property market, especially as affordability pressures begin to ease.

But with $135 billion in mortgages due for refixing, the next six months will be critical for homeowners, investors, and the broader housing market in New Zealand.

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