The 5 Best NZ Home Loans

Best NZ Home Loans

Image Credit: BNZ

By Leo Williams

Need a home loan to buy the perfect house? Well, you’re in the right place, as we’ve rounded up the best NZ home loans for you here!

There’s an endless variety of home loans with different rates and options. With these, it can be overwhelming to start, much less to know which loan you should apply for.

To simplify the task, we’ll guide you through the fundamentals of home loans. In doing so, you will know how to pick from our selection in a short while.

Things to Consider before Applying for a Home Loan

When buying a home, it’s necessary that you get a home loan to complete the payment. As a house can cost a fortune, it may be too much to be paid by cash one-offs.

You can apply for a home loan through a bank or mortgage broker. You can visit your local bank branch or do it all online for an easier and hassle-free experience.

So that you can find the best deal for your mortgage or home loan, here are the things that you should know:

1. Types of Home Loans

Lenders offer different loan options to their clients. Below are the three types of home loans that you can find:

  • Fixed Rate Home Loan

A fixed-rate home loan means that your interest rate is fixed over the specified term of your repayment. No matter the market changes, the rate will remain the same.

However, you won’t be able to benefit from smaller interest if the cash rate goes down. Also, there’s an early repayment fee if you choose to pay the mortgage earlier.

  • Floating Home Loan

Based on economic market fluctuations and cash rates, Floating Home Loans have varying interest rates which can either make your payments cheaper or more expensive.

These are more flexible than fixed-rate loans. It’s not bound to a set period of time, and as such, you can make extra repayments or pay at any time with no added cost.

  • Offset Home Loan

An offset home loan is a type of loan that can cut down your interest costs. This is done by deducting cash from your bank account from your mortgage balance.

Suppose you have a mortgage of $500,000, and your bank account has $10,000. You would only have to pay $490,000 with interest, which helps you save money.

  • Revolving Credit Home Loan

You can think of a revolving credit home loan like a big overdraft. Both your home loan and salary are in one account where money can flow in and out.

The interest you need to pay is based on the limit you use each day. As your income regularly comes into the account, it can replenish that limit for you to use again.

Also, if you made more monthly repayments than you’re required to, you can ‘redraw’ those extra funds to use however you want.

2. Interest Rate

As you’ve seen, the loan type has a direct correlation with the interest rate. There are many low-interest offerings from a great number of lenders.

Therefore, it makes sense that you have to look around for the best interest deal. Some have special rates over a certain period.

At the very least, you should aim for low-interest rates no more than 3%.

3. Repayment Plan

Creditors usually let you decide whether you want to pay weekly, fortnightly, or monthly. Like for any other loans, you have to be sure you can afford your repayment.

Usually, there’s a loan calculator on the loan provider’s website. This helps you decide how much you have to pay in a term to close your home loan.

4. Fees

In taking out a loan, there are some fees that you have to pay. This includes the establishment fee and mortgage insurance (if you’ve made a smaller down payment).

Also, most lenders won’t allow early repayment of your home loan. For some that do, you’ll have to pay an early repayment penalty fee.

The reason for this is practical since, in a way, the lender will lose out on interest revenue from your regular loan payments.

5. Minimum Equity

Minimum equity is the down payment you have to pay for your mortgage or home loan. This is a percentage off the cost of buying your new home.

So for a $100,000 house, you would have to pay $20,000 in cash. This is so you can get the rest of the loan amount which would be $80,000.

Basically, if you can’t pay the minimum equity, you can’t get approved for a home loan with your bank or lender.

The Best NZ Home Loans

Now that you know the basics of choosing a home loan, here’s our lineup of the very best NZ home loans!

1.   Heartland Home Loans

Best Fixed Rate Home Loan

Heartland Home Loans' Homepage
Websitehttps://www.heartland.co.nz/home-loans
Contact InformationLocal: 0800 85 20 20 Overseas: +649 927 9641 [email protected]
Address35 Teed Street, Newmarket, Auckland, 1023, NZ
RatesFloating – 2.50% p.a. 1 year Fixed – 1.99% p.a. 2 year Fixed – 2.35% p.a. 3 year Fixed – 2.45% p.a.

Apply Here

Heartland Bank is leading the home loan market with its interest rates. They offer an undisputed 1-year fixed rate of 1.99% p.a. and a floating rate of 2.50% p.a.

The maximum amount you can loan is $500,000, with the option to repay it within 1 to 30 years. You can fiddle with their calculator to see what repayment plan will fit your needs best.

Regarding the application, you won’t have to fret because it’s fast, simple, and hassle-free. There’s to visit the bank or make a call, as it’s all done online.

Heartland also lets you refinance in case you want to shift to a better rate and term. They’ll credit $750 to your account to give you a start on repaying your home loan.

Pros

  • 1-year fixed rate of 1.99% p.a.
  • Market-leading floating rate of 2.50% p.a.
  • No establishment fee
  • $750 credit to your account for refinancing
  • Flexible repayment options
  • Self-serve online application

Cons

  • Has an early repayment charge

2.   Westpac Home Loan

Best Floating Home Loan

Westpac Home Loan's Homepage
Websitehttps://www.westpac.co.nz/home-loans/interest-rates/
Contact Information+64 800 400 600
AddressLevel 8, Westpac on Takutai Square, 16 Takutai Square, Auckland 1010
RatesFloating:   Choices Floating – 4.59% p.a. Choices Everyday Floating – 4.69% p.a. Choices Offset Floating – 4.59% p.a.   Fixed:   4.15% p.a. for 6 months * 2.49% p.a. for 1 year 3.09% p.a. for 1 year 3.25% p.a. for 18 months * 2.69% p.a. for 2 years 3.29% p.a. for 2 years * 2.79% p.a. for 3 years 3.39% p.a. for 3 years * 2.99% p.a. for 4 years 3.59% p.a. for 4 years * 2.99% p.a. for 5 years 3.59% p.a. for 5 years   *Special rates

Apply Here

Saving up on mortgage costs for your dream home? Westpac Home Loan offers competitive rates and a range of loan options to suit your preference.

Their floating rates vary around 4.59% p.a. throughout the repayment period. You can choose from floating, everyday floating, and offset floating rates.

However, note that you need to open a Westpac savings account for the floating and offset floating options. Your salary is required to be credited into your account for this.

Besides that, they also have fixed rates starting from 2.49% p.a. They currently have special rates for repayments for 1 to 5 years.

If you’re still not sure about what option to take, Westpac has professional advisers to guide you in getting the best loan for buying a house.

Pros

  • 1-year fixed home rate of 2.49% p.a.
  • Wide range of loan options
  • There’s no repayment fee for floating rate option
  • Has a mortgage expert to provide advice
  • Allows you to save a lot on interest costs

Cons

  • Hefty establishment fee of $400
  • Higher floating rate of 4.59% p.a. compared to other lenders

3.   The Cooperative Bank Home Loans

Best Home Loan with an Easy Application Process

The Cooperative Bank Home Loans' Homepage
Websitehttps://www.co-operativebank.co.nz/borrowing/home-loans
Contact Information+64 800 554 554
AddressNew Zealand
RatesOwner-Occupied Type   Floating – 4.40% p.a. Revolving Credit – 4.40% p.a. Fixed 6 months – 2.49 p.a. Fixed 1 year – 2.49% p.a. Fixed 18 months – 2.69% p.a. Fixed 2 year – 2.69% p.a. Fixed 3 year – 2.79% p.a. Fixed 4 year – 2.89% p.a. Fixed 5 year – 2.99% p.a. Fresh Start Floating – 6.40% p.a. Fresh Start – Fixed 1 year – 4.49% p.a.   Standard Type   Floating: 4.40% p.a. Revolving Credit – 4.40% p.a. Fixed 6 months – 2.99 p.a. Fixed 1 year – 2.99% p.a. Fixed 18 months – 3.19% p.a. Fixed 2 year – 3.19% p.a. Fixed 3 year – 3.29% p.a. Fixed 4 year – 3.39% p.a. Fixed 5 year – 3.49% p.a.

Check It Out Here

Are you looking to buy, build, or refinance a home loan? If so, the Cooperative Bank has all the grounds covered for you.

With leading mortgage rates starting from 2.49% p.a. and a very simple loan process, they have some of the best NZ home loans on the market.

Additionally, you can select from fixed-rate, floating rate, or revolving credit loans. You can also break down your loan into smaller parts with differing interest rates each.

They also offer free conditional approval for your home loan. This will speed up the process if you’re refinancing or if you want to set a budget prior to buying a house.

Pros

  • Low-interest rates starting from 2.49% p.a.
  • Offers different loan choices
  • Easy home loan process
  • Up to 30 years repayment
  • Split interest rate option available
  • Free conditional approval

Cons

  • Higher establishment fee of $350 compared to other banks or lenders

4.   BNZ Home Loans

Best Home Loan for Mortgage Advice Services

BNZ Home Loans' Homepage
Websitehttps://www.bnz.co.nz/personal-banking/home-loans
Contact Information0800 275 269
AddressNew Zealand
Rates1 year Classic (fixed rate) – 2.49% p.a. 18 months Classic (fixed rate) – 2.49% p.a. 2 years Classic (fixed rate) – 2.69% p.a.

Apply Here

With impressively low rates, different loan options, and mortgage advisers who care, BNZ Home Loans is a solid choice when you’re buying or investing in a property.

It offers just 2.49% p.a. interest for 1 year or for 18 months. You can choose from fixed, floating, offset, and revolving credit loan options.

Conditional approval is available so you’ll know your baseline amount for loans. It’ll narrow down your home choices and ensure that you have the budget for it as well.

Here’s where BNZ is different: they have mortgage advisers who can come to your place and discuss your options. You can also request a callback from them.

Because of all these and more, BNZ has some of the best NZ home loans.

Pros

  • Great rates of 2.49% p.a. for an 18-month and 1-year terms
  • Different loan options
  • Conditional approval available
  • Mobile mortgage managers
  • You can get a callback from their mortgage experts
  • Loan amount up to $2.5M

Cons

  • Higher floating rate of 4.55% p.a. compared to other home loans
  • Up to $400 establishment fee

5.   Kiwibank Home Loans

Most Flexible Home Loan

Kiwibank Home Loans' Homepage
Websitehttps://www.kiwibank.co.nz/personal-banking/home-loans/structuring-your-home-loan/
Contact Information+64 800 113 355
RatesFixed rate (2 years) – 2.65% p.a. Variable rate – 3.40% p.a. Offset mortgage – 3.40% p.a. Revolving Credit – 3.45% p.a.

Apply Here

With Kiwibank Home Loans, it’s all about flexibility with your mortgage. You can choose from their fixed rate, variable, offset, and revolving credit loan types.

Kiwibank dishes out a low-interest rate of 2.65% p.a. This will help you pay off your debts faster so that you can finally move in the home of your dreams.

You can make extra payments of up to 5% of your loaned amount. However, if you exceed this limit, you will incur an intervening early repayment fee.

We suggest picking a revolving credit loan for the most flexibility. It has no fixed repayment term and is great if you have irregular income and need to withdraw cash frequently.

Pros

  • Low-interest rate starting from 2.65% p.a.
  • Offers fixed, floating, offset, and revolving credit home loans
  • Tailored home loan
  • Also lets you refinance your existing home loan

Cons

  • Has an early repayment charge

FAQS about the best NZ Home Loans


So that’s it for our list of the best NZ home loans. Whether you’re a first-time or veteran home buyer, these mortgage loans will give you plenty of savings with their low rates and fees.

Do you have any questions or comments about our list? If you have any, kindly leave us a comment below, and we’ll get back to you in a flash.

Also, if you need expert advice on choosing a home loan, a mortgage broker can help. For this, you can read about the best mortgage brokers in Wellington!