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Mortgages

Mortgage Rates Daily Commentary
Wednesday 27 November 2024  Add your comment
BREAKING: OCR 4.25%

The Monetary Policy Committee today agreed to reduce the Official Cash Rate by 50 basis points to 4.25 percent. [READ ON]

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Westpac says fix short

Following the recent rise in longer term interest rates, Westpac economists are recommending people stick to shorter-term rates for their home loans.

Friday, November 21st 2003, 1:08AM

by Jenny Ruth

That’s even though Westpac has also raised its floating rate from 7.1% to 7.25%.

"The way the wholesale curve is priced, it’s already got some pretty swift upwards moves in the (Reserve Bank’s official) cash rate (OCR) and a peak at 6% built in," says economist Nick Tuffley.

The OCR is currently 5%. The wholesale market is also currently expecting the OCR to stay at 6% for some time, he says.

Tuffley thinks the Reserve Bank should sit back and wait before raising the OCR but also thinks the bank won’t heed such advice and may raise the OCR as early as December 4 when it delivers its latest monetary policy statement.

While fixing mortgage rates for longer terms will still provide the security of knowing your interest rate won’t change, "you’re back to paying a relatively high price for it," he says.

Westpac’s six months and one year fixed loans are currently well below its floating rate at 6.65% and 6.9% respectively. It also has a non-standard 30-month rate of 6.99%, the result of it purchasing forward cover in the wholesale market.

Confusing the picture for some with large mortgages is the fact that they can often negotiate up to half a percentage point off the floating rate.

But its other rates are considerably higher, ranging from 7.4% for a two-year fixed rate mortgage to 7.75% for a five-year mortgage. Back in June and July, the five-year rate was just 6.5%.

Most people are likely to find themselves paying a lower average mortgage rate over a five-year period if they fix for a shorter time and then roll over to whatever is available at maturity, Tuffley says.

Although perhaps longer than six months might be wise: "Six months might be cheap now, but what’s it going to be when you roll off that?"

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build ▼4.94 - - -
AIA - Go Home Loans ▼7.49 5.99 5.69 5.69
ANZ ▼7.39 ▼6.39 ▼6.19 ▼6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼5.79 ▼5.59 ▼5.59
ASB Bank ▼7.39 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One ▼7.54 - - -
BNZ - Rapid Repay ▼7.54 - - -
BNZ - Std ▼7.44 5.99 5.69 5.69
BNZ - TotalMoney ▼7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ ▼6.95 5.99 5.75 5.69
Co-operative Bank - Standard ▼6.95 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 5.65 5.55 5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 ▼6.65 6.40 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank ▼7.25 6.89 6.59 6.49
Kiwibank - Offset ▼7.25 - - -
Kiwibank Special ▼7.25 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 5.95 6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - 6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank ▼8.19 6.49 6.49 6.49
TSB Special ▼7.39 5.69 5.69 5.69
Unity 7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.10 6.05 5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.64 6.02 5.79 5.69

Last updated: 27 November 2024 9:50am

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