Business Environment Profiles - New Zealand
Residential housing loan rates
Published: 05 January 2026
Key Metrics
Residential housing loan rates
Total (2026)
5 Percentage
Annualized Growth 2021-26
0.1 %
Definition of Residential housing loan rates
This report analyses the average standard residential mortgage interest rates from registered banks for new borrowers, excluding special rates. The data is collected monthly and represents the average of the standard, advertised and offered interest rates. Actual interest rates on loans can vary based on the loan-to-value ratio and the borrower's ability to service the loan. The Reserve Bank of New Zealand (Te Putea Matua) (RBNZ) is the source for this report and its data is presented as the average interest rate for each financial year.
Analyze the wider world in which businesses operate
We measure the upstream and downstream ramifications on thousands of industries so businesses can monitor their external operating environment. Explore membership options today.
Included in an IBISWorld Membership
Our industry reports include 35+ pages of data, analysis and charts, including:
-
Industry Financial Ratios -
Historical and Forecast Growth -
Industry Market Size -
Industry Major Players -
Profitability Analysis -
SWOT Analysis -
Industry Trends -
Industry Operating Conditions
IBISWorld Premium Data
You need a Membership for access
to this data.
-
Access to your choice of 632
industry reports -
Access to full library of 185
Business Environment Profiles
Premium Data
You need a Membership for
access to this data.
Recent Trends – Residential housing loan rates
IBISWorld forecasts that residential housing loan rates will weaken by 3.03 percentage points in 2025-26, averaging 5.08%. To facilitate greater spending from households and support the economy during the pandemic, the RBNZ temporarily removed loan-to-value ratio (LVR) restrictions in May 2020. This measure was reinstated in March the following year and further tightened in May and November 2021 as the housing market and new mortgage lending rebounded. From October 2021, the RBNZ began gradually raising the Official Cash Rate (OCR) in response to rising global and domestic inflation. The Bank continued to raise the OCR over the following three years, resulting in higher residential housing loan rates during that period. Although banks can set mortgage rates independently of the OCR, changes in the OCR are a significant influence on residential housing loans, with the latter following the former in rising and falling.
The implementation of a new macro-prudential tool, the Debt-to-Income (DTI) ratio, on July 1 2024, fundamentally changed the nation's lending environment by capping borrowing capacity to six times the gross income for most owner-operators. In August 2024, the RBNZ decided to cut the OCR, the first time since March 2020. This shift in policy marked the start of an aggressive easing cycle that persisted throughout the 2025 calendar year, dropping it to 2.25% by November 2025. Lending was further streamlined over this period through the rollback of prescriptive affordability regulations as prescribed by the Credit Contracts and Consumer Finance Act 2023.
In recent years, LVR restrictions have been gradually loosened, resulting in further reduced residential housing loan rates compared to those in 2022-23 and 2023-24. Most notably, effective December 1, 2025, the RBNZ raised the 'speed limit' for high-LVR owner-occupiers to 25%, allowing more low-deposit borrowers to enter the market. IBISWorld estimates the residential housing loan rates will have risen at an annualised 0.1 percentage points over the five years through the end of 2025-26.
5-Year Outlook – Residential housing loan rates
IBISWorld forecasts residential housing loan rates to average 4.87% in 2026-27, falling by 0.21 p...
Looking for IBISWorld Industry Reports?
Gain strategic insight and analysis on thousands of industries.
