Thinking of fixing your mortgage rate?

 

Should You Fix Your Mortgage Rate Now? A Look at What’s Happening in NZ and Around the World

It’s April 2025, and if you’re thinking about fixing your mortgage rate, you’re definitely not alone. Right now, homeowners and buyers in New Zealand are weighing up their options — and with everything going on globally, it’s a smart thing to be thinking about.

With the United States ramping up tariffs on imported goods, there’s real concern that inflation could start to climb again. So the big question is: should you fix your mortgage rate now, or hold off a bit longer?

Where Mortgage Rates Are Sitting

The Reserve Bank of New Zealand (RBNZ) recently cut the Official Cash Rate (OCR) to 3.5%, aiming to give the economy a bit of a boost. That’s already had a flow-on effect to mortgage rates:

  • 1-year fixed rates: Around 4.99%

  • 2-year fixed rates: Also about 4.99%

  • 3-year fixed rates: Closer to 5.25%

Compared to the last few years, these are looking much better — and could be worth locking in, depending on your situation.

Why Inflation Might Be Around the Corner

One thing to watch is what’s happening overseas. The US has introduced some pretty hefty tariffs, like a 145% duty on Chinese goods and a 10% tax on imports from other countries. This kind of protectionism tends to push up the cost of goods across the board — and when goods get more expensive, inflation often follows.

In New Zealand, that could mean:

  • More expensive imports (think food, tech, cars)

  • Supply chain disruptions

  • Pressure on local prices to rise

The International Monetary Fund (IMF) has already downgraded global growth forecasts, which shows the risk isn’t just talk — it’s real. And while inflation in New Zealand is still sitting within the RBNZ’s target range, that could change quickly if these global pressures keep building.

Why You Might Want to Fix Now

Here’s why fixing your mortgage could make a lot of sense right now:

  • Certainty: You’ll know exactly what your repayments are, no matter what happens with interest rates.

  • Protection: If inflation does kick in and rates start rising again, you’ll already be locked into today’s lower rates.

Why You Might Want to Hold Off

That said, it’s not a clear-cut decision for everyone:

  • Possible Further OCR Drops: Some economists think the RBNZ could cut rates even more — possibly down to 2.5% by September. If that happens, mortgage rates could fall a bit further.

  • Flexibility: If you’re not fixed, you can take advantage of any future drops. Floating rates and short-term fixes give you more wriggle room.

Some Middle-Ground Options

If you’re feeling a bit stuck between fixing and floating, you’re not alone — and there are ways to hedge your bets:

  • Split your mortgage: Fix part of it for a longer term and leave part floating or on a shorter fixed term.

  • Short-term fixing: Lock in a one-year rate so you’ve got certainty for now but can reassess soon.

  • Talk to an expert: A good mortgage broker or financial advisor can help you find a strategy that fits your situation.

Final Thoughts

In short, mortgage rates are looking a lot better than they were — but the world’s economic picture is getting more complicated. If inflation does start to rise off the back of global trade tensions, we could see interest rates climb again too.

Fixing now could be a smart move to lock in certainty. But depending on your goals (and your appetite for a little risk), it might also be worth keeping some flexibility. Either way, it’s a good time to get advice and make a plan.

Need help navigating your refinancing or fixing your loan?
At Goodwill Law, we can work with you and your bank to make the refinancing process smooth and stress-free. Whether you're fixing your rate, restructuring your mortgage, or buying a new property, our experienced team is here to guide you every step of the way.

Get in touch with us today — we’d love to help you make the right move.

 
Will DowneyGoodwill Law