Home loans became more affordable last month, with the typical home buyer saving $30 per week on mortgage repayments compared to December.

The AMP360 Home Loan Affordability Report, formerly the Roost report, released today, found home loan affordability improved by 4 per cent in January compared with December.

The improvement was driven mainly by a fall in fixed term mortgage rates, with the average two-year fixed rate dropping from 5.97 per cent to 5.89 per cent, while the REINZ's median house price fell from $450,000 in December to $426,000 in January.

That would have reduced the weekly mortgage payments for a typical home buyer to $501.13 compared with $533.19 in December.

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The lower quartile house price dropped to $287,500 in January from $305,000 in December, providing some relief for first home buyers.

That would have reduced the weekly mortgage payments for a typical first home buyer to $374.26 a week compared with $402.97 a week in December.

AMP360's national manager Paul Gardiner said: "There have been some significant movements in home loan rates recently but the headline rates often have special conditions attached to them which may not suit everyone."

Housing was still significantly less affordable than it was a year ago. The report put this down to house prices rising more quickly than interest rates declined.

In January this year, mortgage repayments would have taken 60.3 per cent of the after tax pay of a typical buyer on a median income compared with 57.4 per cent in January 2014 and 53.6 per cent in January 2013.

For a typical first home buyer purchasing a home at the lower quartile price point on a median income, their mortgage repayments would have taken 49.6 per cent of their take home pay compared 47.9 per cent in January 2014 and 45.8 per cent in January 2013.

The report said mortgage payments are considered unaffordable if they consume more than 40 per cent of take home pay.

Auckland was still the most unaffordable place for home-owners.

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Houses in Whangarei, Wanganui, Rotorua, Wairarapa and Invercargill were considered affordable.

In January BNZ, Kiwibank, ASB, ANZ and the Co-operative Bank announced cuts to fixed-term rates.

The latest Demographia report showed Auckland's surging housing market was the ninth most expensive big city, with housing more expensive than Los Angeles, Toronto, New York, Perth, Brisbane and Boston.

Most affordable (percentage of median income spent on mortgage repayments):

Wanganui

26.8 per cent

Invercargill 33 per cent

Rotorua 38.4 per cent

Most unaffordable

North Shore

100.8 per cent

Central Auckland 94.9 per cent

Queenstown 81 per cent