16 Retail mortgage interest rates have remained flat for the past few months after a sudden rise in January due to the cost of offshore funding for the banks. Despite this rise from a low last July, interest rates are still near historically low levels. The small rise in interest rates will have reduced how much prospective home buyers could borrow. The banks have recently begun to compete more aggressively for deposits and tighten their lending standards, which should help alleviate offshore funding pressures. Interest Rates Average Two Year Fixed Rates - % Projected Official Cash Rate - % Source: RBNZ and Interest.co.nz Mortgage Interest Rates - %