Lower interest rates will see more “money in pockets.”
Mortgage holders are set to reap the benefits of lower rates in 2026.Those renewing existing loans previously fixed on higher rates can expect thousands of dollars reduction a year in repayments.
This is the view of Christchurch-based mortgage adviser Tony Mounce who says rates such as the current one-year fixed rate of 4.59% (offered by all the major banks) will mean more “money in the pocket” for many borrowers.
“With rates having dropped from the spike of 7.5%, those needing to renew their fixed terms in 2026 or those taking out new loans - will find their cashflow situation vastly improved.”
Mounce believes this will have significant flow-on effects for the housing market - particularly in Canterbury where he says it is already showing signs of life in 2026 - by giving everyone better borrowing capacity and first home buyers greater opportunity to get into the market.
“For example, someone with a 30-year $500,000 mortgage set at 7.5% has weekly payments of $807. Re-fixing the same loan at 4.59% would see their weekly re-payments fall to $585, a drop of $222 per week or $11,544 per year.
“These are huge numbers, but the money is real,” he says.
Mounce does not expect any significant changes – up or down – in interest rates in 2026. With the Reserve Bank due to announce its next OCR (official cash rate) on February 18, Mounce thinks people can expect a flat trajectory for at least the next 12 months.
“There may be some tweaks up or down, but I don’t think anyone is expecting interest rate changes in 2026.”
Mounce is Managing Director of Tony Mounce Mortgages, a company that in the 16 years it has been in business has written over $10 billion in mortgages, mostly for properties in Canterbury and other regions of the South Island, including Tasman, the West Coast and the lakes districts around Queenstown and Wanaka.
The company, which works with all the major trading banks and most non-bank lenders in New Zealand, was set up by Mounce in 2009 after a 34-year career as a mobile mortgage manager at the BNZ.
“We have a team of 10 mortgage writers several of whom have had over 20 years of experience in the industry,” he says. “Collectively we’ve got well over 100 years of experience in lending but just because we’re experienced doesn’t mean we are not innovative in our approach to helping people secure their finance.
“We get great joy in helping people buy their first home or build wealth through property investment.”
Mounce is optimistic about the outlook for the housing market in the south in 2026. “Compared to other parts of New Zealand, Canterbury and the South Island in general performed well last year - first home buyers especially were prominent - and already there are signs of more life (in the market) this year.
“Proof of this is that we are seeing more people looking for advice so they can make a confident decision for their mortgage and our SEO (search engine optimisation) activity tells us they are increasingly searching things like ‘mortgage broker Christchurch’ or ‘what to do with mortgage’.”
He says rates in the mid-4% area are manageable for most people and is a sign the market is getting back to normal after several years of ups and downs brought about by Covid, high inflation and rising interest rates.
“We thought we might have seen greater benefit in 2025 (from the lower rates) but it does take time for reductions to feed into the pockets of borrowers,” he says. “But this will happen as fixed loans terms start to mature and need re-fixing.”
Mounce says using a mortgage adviser helps people find the most suitable loan and rate – and manage the application process with the lender.
“Everyone’s situation is unique and I believe the growing number of people searching for advice is because many don’t know what to do. Some are buying their first home, others are wanting to upgrade or renovate; someone else may be looking to stay in a property for life or it could be a young couple wanting to head off on an OE.
“All circumstances are different and personal and because we deal with most lenders in New Zealand, we are able to secure the right option for each situation. It’s not just about the headline interest rate - although that is important - but about the nuances of different mortgage products.
“With our experience we can tell pretty much straight away if a loan is likely to be approved as we have the skill to assess what is going to work for a client,” Mounce says.
He says borrowers don’t pay advisers anything for a standard residential mortgage as mortgage advisers like Tony Mounce Mortgages are paid by lenders when the home loan is drawn down.
However, there may be a fee for commercial contracts or non-bank lending which varies on a case-by-case basis.
For more information: tonymouncemortgages.co.nz
Disclaimer - Please note that the information contained within this article provides summary information only and is not a substitute for financial or legal advice. Interest rates quoted and used in examples are correct at the time of writing. Please seek professional advice before applying the information to particular circumstances. The views expressed by third parties on this page are those of the individuals and not the views of Tony Mounce Mortgages Limited. Tony Mounce Mortgages Ltd accepts no liability for errors or omissions. Click here to go to our Disclosure page and learn more about us, our licence, the type of advice we offer, fees, commissions and other conflicts of interest.