If your fixed mortgage is coming up for renewal in the next few months, this post is for you. The signals coming out of the banking sector right now are clear, and getting ahead of this could save you thousands. Let’s talk about what’s happening, why it matters, and what you can actually do about it.
Are Fixed Mortgage Rates Really About to Go Up?
Yes, and the signal is coming from a pretty credible source. The Co-operative Bank’s chief executive Mark Wilkshire has said publicly that fixed mortgage rate increases are likely coming “pretty soon,” and that comment lines up with what’s been happening in the wholesale market. Interest.co.nz has been tracking this closely, with swap rates rising sharply over recent weeks, including a 10 basis point jump in just ten days for one key benchmark rate. That matters because wholesale swap rates are essentially the cost of funds for banks, and when those go up, retail mortgage rates tend to follow.
To put it simply: the banks don’t absorb those rising costs quietly. They pass them on to borrowers. The question isn’t really if fixed rates will rise, it’s more about when and by how much.
BNZ economists are forecasting that floating mortgage rates could reach 7% next year, a level that would put real pressure on household budgets across New Zealand.
The takeaway: The evidence from both bank leadership and wholesale rate movements points firmly toward higher fixed mortgage rates in the near term.
What’s Driving Wholesale Rates Higher?
A few things are happening at once, and they’re feeding into each other. Geopolitical tension in the Middle East has been rattling global markets, pushing investors toward safer assets and creating volatility in interest rate expectations. At the same time, the OCR (Official Cash Rate) path is being reassessed as inflation pressures remain stubborn in some parts of the economy. When global risk rises, New Zealand is not immune. Our swap rates move with global sentiment, and right now that sentiment is nervous.
Worth noting: interest.co.nz reported this week that swap rates have risen significantly since late 2025, with the one-year rate climbing around 70 basis points from late November. That’s not a small move. And when you layer geopolitical uncertainty on top of that trend, the pressure on retail mortgage rates becomes harder for banks to ignore.
The banks themselves, including ANZ, ASB, BNZ, Westpac, and Kiwibank, are all watching the same data. As of writing, you can check the latest live rates at interest.co.nz, because things are moving fast enough that any rate I quote here could be out of date by the time you read this.
The takeaway: Rising wholesale rates driven by global uncertainty are giving banks a solid case to lift fixed mortgage rates, and that case is getting stronger each week.
How Does This Affect Your Refinancing Options?
If you’re coming off a fixed term in the next three to six months, this is where it gets personal. Many New Zealand homeowners locked in rates during a period of relative stability, and rolling off those terms into a higher-rate environment means your repayments are likely going to increase. The degree of that increase depends on the term you choose, your LVR (loan-to-value ratio), and which lender you end up with.
Choosing between a shorter term (say one year) or a longer term (two to three years) right now is genuinely tricky. If rates rise further, locking in for longer looks smart. But if the OCR comes back down faster than expected, a shorter term gives you more flexibility. There’s no universally right answer, and honestly, this is exactly the kind of decision that benefits from a proper conversation rather than a quick Google.
Here’s a rough comparison of the general trade-offs borrowers are weighing right now:
| Fixed Term | Potential Benefit | Potential Risk | Best For |
|---|---|---|---|
| 6 months | Short commitment, review soon | Rolls into potentially higher rates | Those expecting rates to drop |
| 1 year | Balance of certainty and flexibility | May still roll into elevated rates | Cautiously optimistic borrowers |
| 2 years | Certainty through potential rate rises | Could miss drops if OCR falls | Those wanting budget certainty |
| 3 years | Longer protection from rate rises | Break costs if you sell or refix early | Long-term planners, stable situations |
Not sure how this affects you? Book a free chat with Jagdip.
If you’re thinking about refinancing, the key insight here is timing. Waiting until your fixed term expires to start looking around often means you’re making rushed decisions. Banks can sometimes offer a rate lock in advance of your expiry date, so it pays to start the conversation early.
The takeaway: Getting ahead of your refix by at least 60 to 90 days gives you options that a last-minute decision simply doesn’t.
What Does This Mean for First Home Buyers and Property Prices?
Rising mortgage costs don’t only affect existing homeowners. If you’re a first home buyer trying to figure out whether now is the right time to buy, higher rates complicate the picture. The good news, if you can call it that, is that BNZ economists are also suggesting that rising mortgage costs combined with new housing supply coming to market should put a cap on house price growth. That means the property market is unlikely to run away from you in a hurry.
The DTI (debt-to-income) rules introduced by the Reserve Bank are also still in play, limiting how much banks can lend relative to your income. This has already cooled some of the more aggressive borrowing that characterised earlier market peaks. So while affordability is tightening on the repayment side, purchase prices are not expected to spike dramatically either.
If you have KiwiSaver funds available for a first home withdrawal, or you’re eligible for the First Home Grant, these tools become even more valuable in a higher-rate environment because they reduce the amount you need to borrow in the first place. Use the mortgage calculators on this site to run the numbers and see where you stand.
The takeaway: Higher rates are likely to moderate house price growth, which gives first home buyers a bit of breathing room on price, but borrowing costs still need careful planning.
Should You Consider Investment Property in This Environment?
For property investors, the picture is more nuanced. Rising mortgage rates compress rental yield margins and make the numbers harder to stack. That said, if rental demand remains strong and you have a solid equity position, the long-term case for investment property doesn’t disappear. It just requires more precise structuring. Interest deductibility rules, LVR limits for investors, and the choice of loan structure all matter more when rates are higher and margins are thinner.
NZ Herald recently reported on Co-operative Bank’s chief executive signalling these rate increases, and it’s a story that’s resonating with investors who were perhaps expecting rates to stay flat through the rest of 2026.
The takeaway: Investment property can still make sense, but the numbers need to be run carefully with someone who understands the full lending picture.
Bottom Line
Fixed mortgage rates in New Zealand are heading higher, and the timeline is sooner rather than later. Whether you’re an existing homeowner due for a refix, a first home buyer still saving, or an investor weighing your next move, the next few months are a critical window to get your position right.
The single most useful thing you can do right now is talk to a qualified NZ mortgage adviser who knows the full market, not just one lender’s product set. Understanding your options across ANZ, ASB, BNZ, Westpac, Kiwibank, and the non-bank lenders could make a genuine difference to what you end up paying. Reach out to Jagdip for a free, no-obligation conversation about where you sit and what your best move looks like from here.
Further reading: interest.co.nz has more on this topic, including live swap rate tracking and weekly rate commentary that’s well worth bookmarking.