Mortgage Rate Strategy NZ 2026: Fix for 6 Months or 5 Years? (Christchurch Update)

Mortgage Rate Strategy in Uncertain Times: Should you fix for 6 months or lock in for 5 years?

In this episode of Mortgage Matters, Joel Sadler and Advanced Mortgage Solutions founder Scott Miller break down the current New Zealand mortgage landscape and what it means for your next refix decision.

With global uncertainty, rising wholesale funding costs, and ongoing inflation pressures, mortgage rates in NZ are being influenced by more than just the Reserve Bank’s Official Cash Rate. Scott explains why short-term rates (floating to 2 years) are driven by OCR movements, while longer-term fixed rates (3–5 years) are shaped by international markets.

Key topics covered:

Should you fix for 6 months or longer in 2026?
How global events and inflation are impacting NZ mortgage rates
Why longer-term fixed rates are rising despite local conditions
The potential impact of US interest rate cuts on NZ
Current bank lending conditions in New Zealand
Christchurch property market update and growth outlook

Scott shares a practical strategy:
➡️ Consider short-term fixes (around 6 months) if you’re comfortable with risk
➡️ Avoid mid-range terms unless going long (4–5 years) to ride out volatility
➡️ Position yourself for the next interest rate cycle shift

Whether you're a first home buyer, investor, or refixing your mortgage, this episode will help you make smarter, more confident decisions.

For assistance with a new or existing home loan, reach out to Advanced Mortgage Solutions today. www.advancedmortgagesolutions.co.nz 

Transcript

SPEAKER_01 0:06

Hi everyone, welcome to 2026 and the Advanced Mortgage Solutions Podcast. Here with your expert Scott Miller today, and today he's going to give us a bit of a summary of 2025, what we have to look forward to in 2026, and obviously how it's relevant to the two mortgages, buying a home. So Scott, over to you.

SPEAKER_00 0:24

Yeah, hello, happy new year, Joel, and to our viewers. It uh had a bit of a good breakaway, which was nice. Um, the weather wasn't always playing ball, but you know, it was a bit of fun. So um all refreshed, recharged, and ready to go for 2026. Uh, but as you said, you know, it's been an interesting time. Uh 2025 would be seen as a good year, I think. Um, interest rates consider you know, full fell for the whole year. Um, and I think we had a total of about, you know, it was almost 3% in drop from start to finish. So anytime you get that kind of drop, it's good news. Um, one of the weird things about 2025 is normally when you see interest rates drop, you see uh house prices kick off. Um, we really haven't seen that until about now. I think we're really getting some sort of grass shoot type uh feels about things and commentary around house prices starting to come up, uh, particularly in price church. Uh, I don't know if you saw the the latest figures, but it appears that um we we drop we increased about three and a half percent um over December, sort of early January. So um that's a it's a good lead-in to what I think's coming. Um, and I think you know it could even get up to those double figures like we have had in the past, particularly because it has been so long since rates have started to drop to see the natural result of then money become easier to get, more people in the market, house prices going up. It's a it's a pretty standard kind of cycle that seems a little bit disjointed at the moment, but I think we'll find that that catch-up's coming and it's only just around the corner.

SPEAKER_01 2:00

Yeah, yeah, that makes a lot of sense. I have I have seen that sort of Christchurch uh from a regional point of view, the prices have sort of held or had slow incremental growth over the last year compared to a lot of other regions which have come back. But I didn't know that we'd had, was it three, three point five percent growth in such a short period of time?

SPEAKER_00 2:18

Yeah, yeah, well that's right, yeah. Um you know I think interesting. I think the reason that Christchurch kept its prices so well is we've still we're just coming to the end of the impact of the earthquakes, right? Because the earthquakes hit Christchurch exactly at the moment that in the rest of the country they were in an upward projectory on house prices uh and immediately stalled, and actually our our prices fell as a result of the earthquakes. And then you found for quite some time we've sort of been out of sync with everything, you know, and slowly but surely those have started to sink back up again. Um COVID was a good opportunity for that to happen because you know there wasn't a lot to do. Um, a lot of people were spending money, you know, locally, domestically, they couldn't have overseas trips and all those sorts of things that um COVID sort of put the stop to. Um, and we almost caught completely up into the cycles of the rest of the country then. And then since then, you know, just through the matter of timing and things, we've started to bring that back in. So our highs are at the same time with the rest of the country. And that's why we held ours so well, um, because we're still playing that small catch-up game on where our property prices should be for the size of the city compared to the rest of New Zealand. Well, you know, those earthquakes really sort of hurt us in a way that we uh were completely out of sync for so long.

SPEAKER_01 3:43

Interesting. The other thing that I've like, I'm I'm um I won't say specifically where I am, obviously, because that's my personal information, but I'm in a region um of of Canterbury. I'm not in Christchurch, but out of out of Christchurch, which is um one of the fastest growing regions in New Zealand in terms of people moving from big cities. A lot of people seem to be moving from bigger cities to Canterbury, don't they, at the moment, um, after COVID, which is yeah, I imagine also adding to the dynamics of the Christchurch market.

SPEAKER_00 4:10

100%. And and the people that we see, you know, the the number one reason is so why did you come down? It's not because they got a promotion down here or something. It said better lifestyle, um, you know, uh affordability and getting on the housing market. Um, you know, uh that the land is flat, so they had so many different choices of where they could go, sort of thing, with transport being not such an issue like Auckland and Wellington face, you know, going out to the hut or you know, south or north Auckland or over the bridge for Auckland, you know, there's all sorts of barriers in those sorts of landscapes. Uh, not so much here in Christchurch, and and that was the reason for their move. And you're right. Um, a good percentage of people that we're seeing are coming down just for I want to I want to own a house and I want to get on with life, sort of thing.

SPEAKER_01 4:54

Yeah, interesting. And so um, you know, if we're sort of starting to see a bit of price momentum moving, swinging upwards heading into 2026, you'd I imagine you'd be saying to people, now is the time to sort of buy because the market has been at a bit of a lull, as we mentioned last year. Yeah, uh, you know, it's a good time to probably get in now before we hit those, as you said, maybe potentially double digit, if not single digit.

SPEAKER_00 5:20

That's right. And you know, interest rates are still relatively low. Um and we're never going to go to the interest rates that we saw through COVID. That was a completely false economy. Um, and meant there, you know, for that that was meant and placed in there, so it encouraged you know spending and kept the country going without that international sort of visitors and all those sorts of things coming. And a lot of businesses hurt, as you know, and we're just really only getting over that as a country, um, leave alone you know the Canterbury region. You know, um looking forward to 2026, it's going to be an interesting year. I I think we've pretty much seen the bottoms of rates and we've had a bit of a blip in the long-term purchasing power of interest rates. So you've seen those three, four, and five year rates just sneak up a bit above that 5%, where before Christmas they're around that 4.99, 4.95 area. Uh, there's a lot of chief economists around the country sort of scratching their head saying, but there's no reason for that to have happened. You know, it's a it's they still don't really know why we've had this little sort of blip, um, because the world economy is still pretty much in the tank, you know.

SPEAKER_01 6:26

And uh you mean blips of rates up while we're seeing this. Yeah, yeah, why are you going back up?

SPEAKER_00 6:31

You know, the the world economy is still pretty much in the tank. Uh the New Zealand economy is sort of leading that. We're at the front of that and sort of getting out of the issues and uh things that COVID and all those sorts of things, the overspending and the um you know, printing of money through the GFC and all those sorts of things. We've sort of we're leading that charge where the world is quite a wee bit behind us and still only just beginning to sort of look at reducing interest rates and things. So yeah, there's a bit of a head scratching going on, and largely they sort of believe that that'll come down. It'll come back down to where it should be, you know, should be. Uh, and we really won't see any movements in rates or interest rates, I should say, until sort of three-quarters through this year, maybe the beginning of next year, we'll start to see those tick up in a more natural kind of way, rather than this an unusual blip that's come along and no one can explain.

SPEAKER_01 7:26

Yeah, yeah, I've noticed that as well. I was doing a bit of reading and um uh quite a bit of commentary around exactly what you're saying, that you know, it appears that interest rates may have sort of hit hit their bottom uh and over the next sort of six months to twelve months sort of slowly start to increase back up again. Yeah, which is quite interesting. Um, and then you look at the US cycle, which I follow obviously the Federal Reserve, you know, making a decision in January, are they going to drop? Everyone thinks they're gonna pause, but there's a bit of pressure apparently from the bond market. I don't want to get all technical into that side of things, but it's you know, they probably are likely possibly to drop again by March. So how does that US sort of ripple through to our interesting thing?

SPEAKER_00 8:06

You know, that their reserve bank as such, the Fed wrote a note to the government saying, stop pressurising us into decision making. We're independent from your policies and procedures, go away. And uh, I don't think they've ever done that before. So there's been a bit of hidbar around that. Yeah. I think you know, Trumpy would like to see some money flow a little easier, and the Reserve Bank saying we're just not in a position to do that yet, so go away. Uh so that's quite interesting being on the sidelines and seeing that. But look, despite all of the commentary around, you know, world domination and financial matters and all that, you know, the US too do, you know, they they lead the charge. Whatever. If they sneeze, the whole world sneezes with them, sort of thing. Uh, and look, a lot of the funds that we secure over here, particularly for mortgages, are secured for overseas funding lines. Um, that might not always be out of America, for example, but like I said, if it if it happens in America, it's gonna happen everywhere else. So that's uh where if you find that um, you know, the more international sort of exchanges and interest rates are sort of starting to bump up, then you'll find the cost of um purchasing um from a bank's point of view at least, uh, interest or money uh uh will be at a higher interest rate, and they're gonna pass that on to the end user as sure as or eggs or eggs. So um yeah, look, I think that's a wee way away. Like I've just said, I I think we've got almost a whole year of not a lot happening. Um and it does make that uh perfect sort of time to buy that house, regardless of where you are in New Zealand, really, because everyone has this you know access to the same rates regardless of what region of New Zealand you're in. Um and then you'll have the individual sort of capital growth spurts happening all over the show. Um certainly Auckland um and Wellington and Dunedin are sort of well overdue for theirs, so I think that's gonna come on real strong. Um and whenever Auckland comes on strong at anything, you know, it affects the rest of um Canterbury. Um the the one that's going off at the moment, I suppose, you know, is is Queenstown. You know, again, it's just because it's such an attractive uh market for those overseas investors that sort of seem to have a little bit more moolah than us, uh Kiwis. So uh it's a very volatile kind of market there in Queenstown, very up and down. But yeah, the big players are are just around the corner from really kicking off, I think.

SPEAKER_01 10:26

Yeah. I mean, look, for those that are you know looking to refix that may already own a home and say, for example, they've had a note from the bank now, hey, look, you know, say March, just just say, what are we two months away, two and a half months away, uh, you know, you need to refix again and uh you know, send rates through. What sort of term? It's always that tricky thing, isn't it? Do you sort of you know fix for a one-year term to see what sort of unfolds? Do you lock in the five-year rate or three-year rate? Or what's the sort of common?

SPEAKER_00 10:53

My advice i is based off what we're hearing from chief economists in the reserve bank and what's happening around the world. So look, it it's a funny, it's sort of a split advice at the moment. If you're aggressive and don't mind a punt, take six months. Don't go anything longer than six months because you're likely to roll over at a time that you're at the front of or at on the face of the next interest rate increase. So that's have a punt at six months, see what happens in six months' time, and then we have another look. If you're if you're a bit risk adverse and you've got a bigger loan, for example, you might want to split that for half over four years and half over five years. And again, so the one, two, three-year rate, I wouldn't even look at those at the moment because you'd find that you'd be coming out when interest rates are going up. Uh, at least with the four and five year rate, hopefully you've come over the hump of the height of rates and are now going to ride them all the way back down to the new lows, you know, in sort of seven-ish years' time. So, yeah, a bit of a split decision, and that's where I'll say, hey, look, this is what I would do, but I'll leave the final decision to you because I'm not the person paying your mortgage for one, and I don't really understand your risk profile. So, yeah, of course. It's good information, and then they can make their decision from that.

SPEAKER_01 12:08

Yeah, interesting. Brilliant. All right, Scott. Well, look, thanks so much for uh look back over 2025, looking forward to 2026. If someone's in that space with uh obviously looking to buy and they need help, how do they get hold of you and what's the best way to do it?

SPEAKER_00 12:22

The website's the place to go. It's got all of our contact details, uh, emails and phone numbers. It's got loads of free information on there, contact forms as well if you want. It covers everything from you know buying your first home, your subsequent home building. So the website www.advancemorgSolutions.co.

SPEAKER_01 12:41

Fantastic. Awesome Scott. Thanks very much. See you on the next episode.