Home loan rates NZ

Kiwis and Aussies: Who's Winning the Mortgage Game?

Aussies are snagging better mortgage deals while Kiwis are left wondering, why the gap? Find out more!

When it comes to home loans, Kiwis are left scratching their heads looking over the Tasman Sea at our Aussie cousins who seem to be scoring way better mortgage deals. The Reserve Bank of Australia's cash rate is currently lower than New Zealand’s Official Cash Rate (OCR) of 5.25%. This marks a significant difference in borrowing costs that could make your head spin faster than a sheep at a rodeo! Australians opting for floating mortgage rates might just have the upper hand, leading some to wonder if New Zealanders have been playing a different game entirely.

So, what’s the reason behind this disparity? It turns out, while the OCR in New Zealand has been on a steady upward trend to combat inflation, Australia's rates haven't shot up as drastically. Australians are enjoying variable rates that are far more appealing, giving them the upper hand when it comes to flexibility in their repayments. The mortgage market in both countries operates on different playing fields, and with fluctuating economic factors at play, Kiwis could benefit from keeping an eye (or both eyes) on the other side of the ditch.

Let’s not forget, mortgage deals aren't the only thing that makes banking exciting across the Tasman. While Aussies might be reveling in cheaper loans, Kiwis can boast some unique advantages too! Our real estate market has its own quirks, and for many, homeownership is still more attainable compared to cities like Sydney or Melbourne. A drop in house prices in New Zealand's cities could make home buying a sweet dream instead of an outrageous nightmare. Plus, New Zealanders have some of the most spectacular backdrops to their homes with views that could make your heart sing.

Housing markets come and go, but trends can be translated into fun facts! Did you know that the average Kiwi home loan size is about NZD 400,000? In comparison, Aussie mortgages can average upwards of AUD 500,000. And here’s a kicker: as of April 2023, a whopping 33% of Kiwis say they would consider refinancing their mortgage when rates begin to drop! So while Kiwis stay vigilant, perhaps it’s time to take some notes from our Aussie friends and see if we can snag a better deal after all!