Long-term mortgages becoming more attractive

ASB's latest home loan rate report points out that while fixing short-term loans has been a good strategy in recent years, "this approach is now undermined by the prospect of a swift lift in the OCR and mortgage rates".

"Our expectation that the RBNZ will lift the OCR several times in succession influences our mortgage forecasts and our thoughts regarding the various strategies for borrowers," the team said.

With the Reserve Bank expected to lift the official cash rate at the next three meetings, economists at the big four bank suggest a longer-term approach could prove more prudent. 

"Fixing for some of the longer terms provides interest rate certainty for the next few years at a slightly higher cost than the cheapest rates," economist Chris Tennent-Brown said. "For those who want this longer-term interest rate certainty now, the cost of fixing for two to five years is still very low compared to the past twenty years."