If you’re looking for a home loan this year, you may be able to get a better interest rate than you expect.

Brokers said, while advertised home loan rates had not moved since a flurry of cuts pre-Christmas, banks were willing to negotiate and sometimes were offering significant reductions.

Jeremy Andrews, from Key Mortgages, said he had been able to get larger discounts this week than had been available late last year, from several of the banks.

“There are getting to be quite big differences between banks’ advertised rates and what we can negotiate. Sometimes we’re getting 30 to 40 points off advertised special fixed rates or even 75 points off variable. Occasionally even more with some extra negotiating work.”

A 40 basis point discount from ANZ’s advertised one-year special would take the rate to 6.99%.

“Some banks are offering larger discounts on the shorter terms, and others such as ANZ seem to be knocking more points off the longer term rates. It’s great to have a few options in front of us which we can present, depending on owners’ goals and expectations.”

He said banks were becoming more competitive about winning deals for new lending.

“Some banks do negotiate pricing harder on larger loan sizes, but others will offer just as strong for lower size loans.”

Andrews said other incentives could help buyers, too. ANZ was offering cashback of $5000 for first-home buyers, or 0.8% of the home loan value for borrowers with good equity. Kiwibank was offering 0.9%.

“ANZ’s cashback is especially appealing for first-home buyers looking at under $400,000 to $500,000 loan size, and some of the banks offering first home loans can offer super sharp rates with as low as 5% deposit.”

David Cunningham, chief executive of Squirrel, said 7% could be a benchmark in negotiations. “You shouldn’t be paying more than 7% would be my observation at the moment.”

Glen McLeod, from Edge Mortgages, said how flexible banks could be would depend on the wholesale market.

Wholesale interest rates dropped sharply before Christmas but ticked up again slightly earlier this month.

“It is a daily request that we need to make as they can change very quickly.”

He said the size of the loan could make a difference to the discount offered, as could whether it was for an owner-occupied property or an investment purchase.

“At present clients have the feeling that rates are going to start coming down quickly. I am cautious when it comes to where the market is heading with interest rates. The next inflation figure will give a better indication if we are really getting on top of things. It will be good to see where consumer spending has been over the holiday season. Has spending reduced enough to satisfy the Reserve Bank?”

Bloomberg economists said earlier this week that the Reserve Bank could be prompted to cut the official cash rate (OCR) earlier than expected, and said its current hawkish stance was unrealistic.

They said the impact of the tightening that happened so far was being felt and cuts could happen in the first quarter of the year as the bank had to switch from fighting inflation to reviving demand.

Andre Castaing, an economist at ANZ, was not convinced it would happen so quickly.

“Our forecast is for the OCR to remain on hold at 5.5% throughout 2024, with rate cuts from early 2025. Risks are tilted to the Reserve Bank delivering rate cuts earlier than that, with Q3 GDP data showing the economy is slowing more than the Reserve Bank previously expected.

“There have also been positive developments on the inflation front, but these have largely come from the volatile components such as sharp falls in airfares, that the Reserve Bank will welcome, but have little influence over. The Reserve Bank remain concerned about the persistence of domestic-driven inflation and in November indicated a strong preference to leave the OCR at current levels for a considerable period of time.”