4.49%: BNZ announces cut to 1-year fixed home loan rate

Bank of New Zealand (BNZ) has cut its standard advertised 1-year fixed home loan rate to 4.49 per cent per annum, effective immediately for new and eligible existing customers.

Karna Luke, BNZ’s Executive of Customer Products & Services, says the bank is "competing hard" for new home loan customers amid a shifting interest rate environment.

“We’re seeing strong customer demand for our 1-year fixed term as borrowers look for the right balance between securing a competitive rate and maintaining flexibility,” Luke said.

The 26-basis-point reduction from the bank’s current average rate of 5.19 per cent could equate to more than $2400 in savings over 12 months for a customer with a $500,000 mortgage on a 25-year term, the bank said.

“At 4.49 per cent, this is a nearly 40 per cent drop from the February 2024 peak of 7.35 per cent for the 1-year fixed term – providing real relief for households,” Luke said.

The new rate is available immediately to new customers, and to existing customers who are refixing or currently on variable rates.

“We know household budgets remain tight for many New Zealanders, and these changes will help reduce mortgage payments, whether you’re buying your first home, moving from another bank, or refixing an existing BNZ home loan,” Luke said.