Will NZ mortgage rates drop in 2026?

No one can say for certain. Mortgage rates follow the Reserve Bank's Official Cash Rate and wholesale funding costs, and the outlook can change at every OCR review. The Reserve Bank publishes each decision and its forecasts at rbnz.govt.nz. Rather than betting on one outcome, many borrowers split their loan across different fixed terms.

Should I fix for 1 year or 2 years in NZ today?

It depends on your plans and how much certainty you want. A shorter term lets you refix sooner if rates fall but exposes you sooner if they rise; a longer term gives certainty for longer. Splitting your loan across terms spreads the risk. We compare current pricing across lenders when your fixed term is due.

What is the current stress-test rate for NZ banks?

Each lender sets its own test (assessment) rate and changes it as market rates move. Lenders check whether you could afford repayments at a rate above the one you'll actually pay, so what you can borrow depends on each lender's current test rate. We compare lenders' current test rates when working out your borrowing power.

How does the OCR affect my floating mortgage rate?

Floating rates usually move after an OCR change, but each bank decides how much of the change to pass on and how quickly. Fixed rates are driven more by wholesale swap rates, which move on expectations of future OCR decisions.

Investor Scaling — Case Study

Apartment Investor
Scales From 1 Property to 5 in 18 Months.

A Hamilton-based investor used equity recycling, new-build LVR exemption, and a multi-lender structure to grow a portfolio of 5 income properties.

1 → 5

Properties

18 mo

Timeframe

$2.1M

Portfolio Value

3 lenders

Diversified

Fresh Cash

The Situation

The problem.

James, a 41-year-old Hamilton engineer earning $145,000, owned a single investment property valued at $620,000 with a $310,000 mortgage. He had a clear goal: grow to 5 income properties within 2 years to support semi-retirement by age 50. His own bank told him he could potentially add one more property — but no more — using the equity in his existing property.

His existing bank's serviceability calculation treated rental income at 70% shading and applied their high test rate to both his existing and any new debt. The combined assessment showed he'd reach his investor LVR cap quickly. James felt stuck — the path to 5 properties seemed mathematically impossible without significant cash injection.

James met Finch through a referral from his accountant. We modelled his portfolio across the full NZ lender panel, including specialist non-banks comfortable with multi-property investors. The result: a sequencing strategy that would let him hit his target within his original timeframe without injecting fresh cash.

The Finch Approach

How we solved it.

Equity recycling from existing propertyWe refinanced his existing investment property with a new lender at a sharper rate and split structure, releasing $124,000 of usable equity (within the 65% LVR investor cap) without selling the asset. That equity became the deposit for property #2.

New-build LVR exemption strategyProperties #2, #3, and #4 were all new-build purchases in growth Hamilton suburbs (Rototuna and Flagstaff). New builds are LVR-speed-limit exempt, allowing 80% LVR on each rather than the 65% investor cap — meaning his equity went much further per purchase.

Three-lender diversificationRather than concentrate all loans with one bank (which compounds serviceability constraints), we placed each property with a different lender — main bank for properties #1 and #2, a regional bank for #3 and #4, and a specialist non-bank for #5. This stand-alone structure preserved his serviceability headroom at each step.

Interest-only structuring on investment propertiesAll five properties were structured with 2-5 year interest-only periods, maximising cash flow during the scaling phase. With interest deductibility restored from April 2025, the strategy is tax-efficient and supports continued portfolio growth.

The Outcome

The result.

James reached 5 properties exactly 18 months after his first conversation with Finch. Combined portfolio value: $2,100,000. Combined borrowings: $1,540,000. Combined gross rent: ~$2,650/week. He invested $0 of fresh cash — every purchase was funded through equity recycling and the new-build LVR exemption.

His existing property (now property #1) was refinanced again at month 12 of the journey to capture continued equity growth and a $4,800 cashback contribution. His total cashback collected across the 5 transactions: $18,400.

James's feedback: "My existing bank told me one more was the limit. Working with Finch and structuring across multiple lenders meant the limit was actually about 5 — and I got there inside the timeframe I set. The semi-retirement plan is now well on track."

Useful NZ sources: the Reserve Bank of New Zealand for current lending policy, and Kāinga Ora for first-home support schemes.

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Apartment InvestorScales From 1 Property to 5 in 18 Months.