Longer-term mortgage rates fashionable again

Mortgage borrowers nearly 18-month love affair with floating and short-term fixed rates appears to be all but over.

The latest RBNZ data series on lending fully secured by residential mortgages shows the majority of borrowers in March had a preference for one- and two-year fixed terms.

Nearly 40% of owner-occupiers uplifting new mortgages in February took them on floating terms, but just a month later that had dropped to just under 24%.

Similar to the almost overnight rush by borrowers to short-term ratesin anticipation of lower interest rates when the RBNZ started dropping the OCR, the turnaround to longer-term fixed rates has shown up in data at a similar speed.