New Zealand mortgage repayments rise despite falling house prices

In New Zealand, falling house prices are failing to reduce mortgage repayments for first-home buyers because rising interest rates are offsetting the decline in property values. Data shows the national lower-quartile sale price dropped by $41,000 between November 2025 and August 2026, falling from $616,000 to $575,000. However, during this same period, average two-year fixed mortgage rates rose from 4.49% to 5.45%.

For a buyer with a 20% deposit on a 30-year loan, estimated weekly repayments increased from $575 to $599 despite the lower purchase price. While Wellington and Nelson/Marlborough saw repayments decrease due to significant price drops, most other regions experienced increases.

Financial pressure continues as Kiwibank has raised most fixed mortgage rates, including a 0.20 percentage point increase to its one-year rate. Market analysts suggest that rising international bond yields and wholesale borrowing rates could trigger further fixed-rate increases, even ahead of potential decisions by the Reserve Bank.