Interest-rate rises are looming, with some senior bank experts even picking floating rates to be at 7 per cent by the end of next year.
The median advertised floating rate is now 5.85 per cent.
The rises will come slower than Finance Minister Bill English hinted last weekend, but banks say now is the time to beat the rush for fixed-rate deals.
On Friday, ANZ announced an increase in its standard one-year rate - from 5.19 per cent to 5.25 per cent.
ANZ chief economist Cameron Bagrie said the risk of interest-rate rises was higher now than it had been a few months ago. "But it's not immediately around the corner."
He expected some moves in the OCR early next year.
The Reserve Bank had finalised its arsenal of macroprudential tools aimed at cooling the property market, including loan-to-value restrictions. Bagrie said if they had a noticeable impact on house-price inflation, it would push out the need for interest-rate hikes. "If we don't see a levelling out, it's game on."
Jane Turner, an ASB economist, said she was expecting an OCR move next March and floating rates would follow suit. But she said fixed rates could start to creep up between now and the end of the year. "Fixed rates typically move ahead of an increase in the OCR."
She said homeowners would not be hurt significantly by the rising rates because the Reserve Bank would be responding to an improving economy. "The OCR will act to offset a rise in income growth, so households won't be worse off."
Inflation wasn't running hot enough to prompt the Reserve Bank to move on the OCR this year, Westpac chief economist Dominick Stephens said. "The Reserve Bank doesn't have grounds to increase [the OCR] until next year."
But he said once rises started, they would be swift. He predicted floating rates could reach 7 per cent by the end of next year. But Stephens said borrowers should not take the fact that rates were not due to move this year as a reason to be complacent.
Borrowers can save money just by fixing. There are two-year fixed rates available below 5 per cent, almost a percentage point lower than median floating rates.
When asked whether there was a risk rates would rise within two years and leave fixed borrowers worse off at renewal, Stephens said rates needed to rise a lot: "If that's what you think will happen, fix for three, four or five years." Stephens said borrowers who fixed now could "lock in" the market expectation that rates would be low for a long time, "which I think is incorrect".
Once people realised rates were rising, they would flock to fix and that in turn would push up rates. "In my view, fixing is likely to result in a lower interest bill over the entire life of the loan."
BNZ chief economist Tony Alexander said interest rates were hard to predict. "I don't think anyone has got their interest-rate forecast right for the last four years."
NZIER economist Shamubeel Eaqub said Reserve Bank governor Graeme Wheeler had to strike a balance: "The Reserve Bank still wants to nurture the economy, but balance that against the risks of a hot, frothy property market in Auckland."
He said official cash rate (OCR) rises were a blunt tool that punished all regions and sectors of the economy. Outside Auckland and Canterbury, property prices are still below their 2007 peak. The Reserve Bank also had to take into account the effect an OCR hike would have on the NZ dollar, which is already high enough to hurt exporters.
Eaqub expected homeowners to be paying 1 or 2 per cent more by the middle of next year.