10-year fixed rates come to the market

TSB Bank has taken a new position in the home loan market which is not just based on price.

Friday, February 6th 2015, 8:29AM

It has launched what is believed to be New Zealand’s first 10-year fixed rate home loan and it has priced it competitively at 5.89%.

The only other lender with a term of more than five years is BNZ which offers a seven-year term; however it’s offer is currently priced at 6.89%.

TSB’s 10-year loan is below what the other bank’s are offering for five-year terms.

"We’re delighted to offer New Zealand’s very first 10-year fixed home loan giving Kiwi families and property investors certainty to plan for the long-term with a competitive interest rate," TSB Bank chief executive Kevin Murphy said.

A 10-year rate will give borrowers certainty around interest rate repayments; however the break costs of getting out of such a long term would likely be expensive.

While this is a first for New Zealand long-term fixed rate loans have been offered in other countries for many years.

Tags: Mortgage Rates TSB

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