The country's first ever 10-year fixed home mortgage rate is being described as a publicity stunt and one other banks are unlikely to follow.
Photo: RNZ / Diego Opatowski
TSB, which is offering the new loan, has set the interest rate for it at 5.89 percent, which is less than what many other banks are offering on a five-year fixed rate.
Last week, the Reserve Bank held the official cash rate at 3.5 percent, but hinted it could be cut to stop inflation from falling further.
TSB chief executive Kevin Murphy said its research suggested there was a gap in the market for longer-term loans, and it would appeal to homeowners wanting certainty, especially first home buyers.
He said it appeared interest rates could stay low for some time.
"Forecasts are suggesting that we are in for a period of low interest rates. So we think we should be passing that opportunity onto our clients and provide them some certainty if interest rates do rise out into the near horizon."
Mr Murphy said there has already been significant interest in the 10-year fixed rate.
Mortgagerates.co.nz publisher Phillip Macalister said although longer-term rates were popular overseas, he did not believe other New Zealand banks would start offering the same.
"I suspect it is a bit of a publicity stunt. In New Zealand, BNZ does have the seven year rate, but no one has ever followed that one.
"So I'm not expecting to see a huge amount of people following it."
He said people considering TSB's new rate should think about what they would do if interest rates fell over the next decade.
