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Fixed rate home loans

Fixed home loan rates offer greater certainty because you lock in your repayments for a set period.

A fixed interest rate mortgage allows you to lock in a certain interest rate for a specified period (usually between 1 and 5 years). During the fixed period your rate will not rise. But it won’t fall either. A floating rate loan can change at any time.

Fast facts: fixed rates

  • A fixed interest rate is typically lower than a floating rate.
  • A fixed rate mortgage is less flexible. You usually aren’t able to make extra repayments once you’ve locked in the rate and there may be higher costs for leaving the mortgage to refinance. Always read the fine print.
  • Once the fixed rate period ends you will go onto a variable rate. This is a really good time to look around and see if you can refinance to a better deal somewhere else.

Should I go for fixed or floating?

Let’s weigh the positives and negatives of fixed rates in more detail.


  • Repayment certainty. A fixed-rate home loan offers you peace of mind in knowing what your repayments will be. This allows you to budget more effectively.
  • Security. With a fixed-rate home loan you are protected from interest rate rises as your interest rate is locked in for the specified term. If rates rise, you come out ahead.
  • Flexible loan terms. Fixed-rate mortgages are available from many New Zealand lenders with a variety of fixed loan terms available.
  • Low rate offers. Many lenders now offer very competitive fixed rates with cash back offers.


  • Limited features. Fixed rate loans don’t have a lot of flexibility compared to floating rate mortgages. Most lenders don’t offer fixed home loans with 100% offset accounts.
  • Break costs. If you decide to break out of a fixed rate loan before the end of the specified term, you may face a break cost. This can cost a few hundred dollars, or potentially thousands.
  • Rates could drop. If the Reserve Bank of New Zealand slashes the official cash rate (OCR) you could end up with a higher rate compared to floating home loans.

In short, if you value certainty over flexibility then a fixed rate could be for you. If you care about extra repayments and mortgage features you might be better off with a floating rate.

Use our switching costs calculator to help you calculate whether refinancing your loan now will end up saving or costing you money.

More fixed rate questions answered

Here are some of the most common fixed rate questions and answers to them:

  • How much will I have to pay if I exit the loan early? Breaking costs for ending a fixed rate loan early depend on how much time you still have left on your term, the rate you locked in your loan for and the rate your lender secured your funds for.
  • Are there any other options available? You may want to consider applying for a split rate option as this gives you the best (and worst) of both worlds.
  • What happens once my fixed term ends? Your lender will usually notify you that your loan term is going to end and give you the option to fix for another term or allow your loan to revert to a floating rate.

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