Here is your monthly interest rate report.

This gives you a quick, plain English update on interest rates.

No fluff. Just simple facts. That way, you can decide what to do with your mortgage.

How are interest rates changing?

So much happened over the last month.

Inflation fell to 3.3%. That’s lower than the Reserve Bank thought it would be. They thought 3.6%.

That’s part of the reason why every single big bank dropped their interest rates over the last month.

The ones that stood out to me:

• Westpac dropped their 2-year rate to 6.19%. That’s down 0.56% since last month’s report. That’s huge
• Kiwibank dropped its 1-year rate from 6.99% to 6.75% – the current lowest 1-year rate (of the big banks)

These changes are coming thick and fast. Westpac dropped its 18-month rate 3 times in the last month.

What’s next?

On Wednesday, the Reserve Bank will decide what to do with the OCR. That could start a fresh round of cuts, depending on what happens.

As usual, you can see all the latest interest rate changes here. This page changes every day.

How much can I negotiate off my interest rate?

The banks aren’t discounting as much as last month. They all advertised high rates in July, then cut them in the negotiation.

Now, they are cutting publicly. So you get less of a discount. But a lower rate overall.

For context, the lowest 1-year rate I negotiated last week was 6.59%.

This was from a smaller bank. That’s about 0.26% lower than I would have got a month ago.

That will save an investor $25 a week on a $500k interest-only loan.

Here are the discounts my team at Opes Mortgages is negotiating off the bank’s interest rates.

This gives you a sense of the discount you might be able to get.

What cashbacks can you get?

Last month, a reader of this newsletter asked, “What sort of cashbacks are banks offering?”

Remember, a cashback is where a bank gives you money as an incentive to use it.

You’ve then got to stick with that bank for 2-3 years. Otherwise, you have to pay some of the money back.

Most banks will give you a cashback of 0.8% - 1% of your loan value.

So if you take out a $500k loan, they might give you $4,000 - $5,000 in cash.

A couple of quick things to keep in mind. The maximum cashback you can get is usually around $20k. You can usually only get cashback if your loan is $200k+, and not every lender does them.

There are a couple of other T’s and C’s. So chat with your mortgage adviser to see the best deal you can get.

Is it getting easier or harder to get a mortgage?

It is getting much easier to get a mortgage. The servicing test rates are (finally) starting to drop.

This is the interest rate a bank uses to see if you can afford a loan.

The lower the test interest rate, the more you can borrow (all else being equal).

Here is the servicing test rates banks are using compared to last month.

Banks are also loosening some of their other criteria. Here’s a newsletter my colleague Andrew wrote about how much more you can borrow.

What to look out for this month

The Reserve Bank will review and release the OCR tomorrow.

My gut says it’s 50/50 about whether we’ll get a cut.

Whatever happens, Andrew’s newsletter will be out on Thursday with all the analysis. Look out for it – it’s called Private Property.

As always, if you need help with your mortgage, hit reply and let me know your situation. I’ll come right back to you.

Talk to you again next month,

Pete

– Mortgage Adviser, Opes Mortgages

P.S. This is only the fifth version of this newsletter. To make it even better, I need your feedback.

I only want to give you the best info (the stuff you actually want). And as you’ve seen in this newsletter – I actually listen!

So, if anything is missing (or there’s data you want to see), hit reply, and I’ll see if I can get it in for next month’s update.

P.P.S. Wondering why you're receiving this email? You signed up for updates on interest rates on the Opes Partners website.