What a difference a year makes.
In January of this year, kiwi owner-occupiers took out over $2.7 billion worth of new residential mortgages at rates that were fixed for two years or more.
This made up some 46.5% of the month’s owner-occupier total, which was $5.83 billion.
If we compare that with 12 months earlier, in January 2025, then the owner occupiers took out just $283 million in mortgages fixed for two years or more. And that represented only 6.8% of the $5.448 billion owner-occupier total that month.
What happened?
Well, expectations. They changed.
Back at the start of last year homeowners, having seen the Reserve Bank (RBNZ) starting to cut the Official Cash Rate (OCR) in August 2024 from the cycle high of 5.5%, were looking for more. The expectation was for mortgages to keep coming down, so, the strategy was to ‘go short’ and wait for further reductions in mortgage rates in order to then fix for a longer term later at a, hopefully, lower, rate.
The strategy worked pretty well. In January 2025 the OCR stood at 4.25%. By the end of the year it was 2.25%, which is where it still is.
So, anyway, in January of last year it’s probably understandable that not many people were looking to fix their mortgages for as long as two years or more.
Now, however, much has changed. At its November 2025 OCR review the RBNZ dropped the OCR, yes, by 25 basis points – but signalled that was very probably IT for cuts. And subsequent events have only reinforced that the next move, whenever, will be up.
The flight to fixed
And so, cue big changes in the fixed term mortgage landscape – and also in the return to complete dominance of fixed mortgages in general.
The RBNZ figures for January show that across all of the mortgages taken out (including those by investors) in the month, the percentage split between fixed and floating was 81% to 19%, up from 78.2% to 21.8% in December and 50.6% to 49.4% in November – when people were still awaiting that RBNZ OCR decision. (Graph below sourced from the RBNZ’s summary of the January data.
The percentage of fixed mortgages to floating is now at its highest level since August 2024 – and that date doesn’t sound like it’s a coincidence, having been the month the OCR cuts started.
In terms of specific preferences, within the fixed mortgage range, and looking specifically again at the owner-occupiers, we can see that the 46.5% figure of new mortgages fixed for two years or more that we referenced at the top of this article is the highest such percentage since January 2023 – so in three years.
This particular data series, which unlike others in the RBNZ mortgage series reports mortgages as they are actually drawn down rather than when they are committed to, has been going since only 2021. And in that time only once in fact has the amount of mortgages fixed by owner-occupiers for two years or more in a single month exceeded 50% and that was in September 2021 – which again, probably not coincidentally, was the month that the RBNZ actually started to hike the OCR up from the emergency pandemic setting of 0.25%.
Given the current inflation concerns, with our annual rate sitting at 3.1% (outside the RBNZ’s targeted 1% to 3% range) as of the December quarter, and now oil shock fears, it wouldn’t be surprising to see perhaps even more people going for longer options in coming months.
In January 2026 the two-year fixed mortgage was the most popular choice for owner occupiers, with 28.6% of the owner-occupier total. Next most popular was the one-year with 21.1%.
The one-year term is the usual favourite
Since this data series began the one-year has been overall the most popular choice, attracting an average monthly share of 30.2% of owner-occupier mortgage money. Then comes the two-year with 18.6%, the 18-month with 8.8%, the six-month with 8.6%, the three-year with 8.5%, the five-year with 1.8% and the four-year with 1.0%.
Six-month terms went from seldom featuring to supremely popular during the ‘waiting for the RBNZ’ period in 2024-25.But in January, the six-month mortgages were largely deserted, with just a 5.2% share, the lowest since October 2023.
As can be seen from the averages shown above, the five-year rates have rarely been popular, but they did attract a 4.4% share of the total for owner occupiers in both December and January – the highest percentage since May 2021.
In terms of investor mortgage statistics in January – these showed similar behavioural patterns to those for the owner occupiers. The two-year fixed terms were most popular with 27.1% of investor new lending, up 6.5 percentage points from 20.5% in December.
The RBNZ says the share of new residential investor lending increased for the one-year, two-year and three-year fixed terms in January 2026.
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