As the busy house-hunting season heats up, banks across New Zealand have started cutting interest rates. The lower rates could cut years off some mortgages, saving homeowners thousands of dollars in interest repayments.

Mortgage holders and prospective homebuyers with a deposit of at least 20% are now being offered a three-year fixed home loan rate of 5.59% by lender BNZ, down from its previous three-year rate of 5.99%. Kiwibank also cut its two-year rate by 0.2% to 5.55%.

According to industry experts, consumers should expect better deals from other major banks soon. Both Shamubeel Eaqub, principal economist with the New Zealand Institute of Economic Research, and the Real Estate Institute’s chief Helen O’Sullivan said house-hunters and homeowners who were able to re-fix their mortgages could benefit from the lower interest rates.

“Given how competitive the home lending market is, I can’t imagine the other banks will not respond,” says Ms O’Sullivan. “If you can find an offer from a bank, you should definitely be asking your own bank to match it if you’re re-fixing.”