THE RATE ESCAPE
With rates easing, Brooke Reynolds from Rapson Loans and Finance explains how to make every dollar work harder for your home goals.
As a mortgage adviser, I’m often the first to hear the collective sigh of relief when interest rates start to fall. Suddenly, those repayments feel a little less suffocating and the financial horizon looks a touch brighter. But while lower rates are welcome news, there is actually a lot more to think about than a slightly smaller weekly or fortnightly repayment.
If you’re already a homeowner, it’s tempting to let those savings slip quietly back into everyday life. Though there’s nothing wrong with a few extra dinners out and more room in the budget, if you can, consider keeping your repayments where they are. It’s one of the most effective, low-effort ways to get ahead.
By paying the same amount while your rate is lower, you’ll chip away at your principal faster and save thousands in interest over the life of your loan. Future-you will be very grateful.
A rate drop is also a good reminder to review your mortgage structure. Should you fix now? Should you split your loan? Locking in a lower rate can offer certainty, but there’s real value in maintaining flexibility as the market continues to shift. This is where personalised advice matters. The right structure isn’t one-size-fits-all, and small tweaks can make a meaningful difference over time.
For buyers, falling rates can feel like a golden ticket. Yes, your borrowing power usually increases, but so does everyone else’s. More buyers step into the market, competition ramps up, and the home that felt comfortably within reach last month may suddenly attract hotter interest. The best thing to do is to get your pre-approval sorted early, understand your true limit and don’t let cheaper money nudge you into paying more than a property is worth to you.
Lower rates also affect your savings behaviour. With less interest being earned on money sitting in the bank, it’s a good moment to check whether your savings accounts are still working for you. And if you’re building a deposit, make a habit of reviewing your KiwiSaver regularly. You want to ensure your fund choice and contribution strategy are supporting your home-buying goals, not quietly undermining them.
Falling interest rates are an opportunity, not a guarantee. They can open doors, but only if you walk through the right ones. Before you make a move, make sure you think about your strategy. In a shifting market, a plan is everything.
