16 Retail mortgage interest rates have remained flat for the past few months after a sudden rise in January. Despite this rise from a low last July, interest rates are still at historically low levels. The small rise in rates will have pulled back how much first home buyers could borrow, and will have caused a little pain for people heavily in debt. However the small rise won’t be causing widespread pain. The cost of money from offshore continues to increase, and this cost may be passed on to consumers through increased mortgage interest rates. However banks are also under pressure to absorb this cost increase rather than just pass it on directly. Interest Rates Average Two Year Fixed Rates - % Projected Official Cash Rate - % Source: RBNZ and Interest.co.nz Mortgage Interest Rates - %