Buying guide
What are home loan interest rates and how do they work?
A quick, jargon-free guide to the cost of borrowing.
AI summary
Understanding home loan interest rates is crucial for Kiwi buyers. Interest is the cost of borrowing from a bank, influenced by factors like the Official Cash Rate (OCR) and your loan size.
You'll choose between two main types:
- Fixed rates offer certainty, locking in your repayments for a set term.
- Floating rates move with the market, offering flexibility for extra payments but less predictability.
You can also opt for a split loan, combining both types.
What you’ll learn:
What are home loan interest rates, and why do banks charge them?
You need to be aware of home loan interest rates when budgetting for your home.
How are mortgage interest rates calculated?
You'll need to decide if you'd prefer a fixed or floating interest rate.
Fixed and floating interest rates explained
Floating interest rates
Fixed interest rates
A bit of both
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