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, influenced by factors like the Official Cash Rate (OCR) and your loan size.
You can choose between:
- Fixed rates for payment certainty.
- Floating rates for flexibility with extra payments.
- A split loan to combine both approaches.
Each option has unique benefits and drawbacks. For personalised advice, it's best to consult a mortgage broker or your bank to find the right structure for you.
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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