tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, November 24th, 7:23PM

Mortgages

Mortgage Rates Daily Commentary
Friday 22 November 2024  Add your comment
Backlash against banks’ home loan processing times; New line of credit business offering

Mortgage advisers are taking a stand against banks’ strung-out home loan processing times. [READ ON]

Small business lender Bizcap adds line of credit product. [See here]

rss
Latest Headlines

Reserve Bank raises rates and signals more to come

As expected, Reserve Bank governor Alan Bollard has raised interest rates for the fifth time this year and is promising more to come is likely.

Thursday, September 9th 2004, 3:28PM
As expected, Reserve Bank governor Alan Bollard has raised interest rates for the fifth time this year and is promising more to come is likely.

He raised the official cash rate (OCR) from 6% to 6.25%, citing the surprising strength of the economy, stretched resources and strong inflation pressures.

Nobody was surprised at the move itself, least of all Bank of New Zealand economists who were already predicting another rate rise in October and a 40% chance of yet another move in December.

BNZ economist Stephen Toplis says his bank will probably move to a formal prediction of a December rate increase after today’s statement. That would take the OCR to 6.75% which he says "won’t be too far from the top."

The Reserve Bank has "clearly signalled that the economy’s operating at above full capacity and that growth needs to slow a lot to relieve those tensions," Toplis says.

"Even at these levels, interest rates are only barely above what’s commonly considered to be neutral. The big problem with the tightrope they’re (the Reserve Bank) are walking is that they need to slow the economy substantially but they don’t want to throw it into recession," he says.

But Brendan O’Donovan, chief economist at Westpac Bank, thinks Bollard is risking just that. While he too thinks a further rise in the OCR in October is "virtually guaranteed" by today’s statement, and that the OCR is likely to hit 6.75% by year’s end, he thinks Bollard should be allowing time for the rate rises to date to start working. It is generally assumed that a rate increase takes between a year and 18 months to start affecting activity.

"At the moment we’ve still got the big tail wind from last year’s big house price increases" and that should last through to the first quarter of next year.

O’Donovan says that with about two-thirds of bank lending now at fixed interest rates, it takes about 1.4 years on average before individuals re-fix their loans.

He also compares the New Zealand central bank’s actions to that of Australia’s Reserve Bank. While the RBNZ has raised the OCR from 5% to 6.25% so far this year, the RBA has raised its cash rate from 4.75% to 5.25% only.

« Reserve Bank hikes ratesBrokers debate mortgage reduction operators »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 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 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
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 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 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 ▲7.75 ▲6.65 ▲6.35 ▲5.99
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.60 6.75 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 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 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 8.69 6.49 6.49 6.49
TSB Special 7.89 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 7.99 6.10 6.09 5.69

Last updated: 20 November 2024 9:45am

Previous News

MORE NEWS»

News Bites
Compare Mortgage Rates
Compare
From
To
For

To graph multiple lenders, hold down Ctrl key while clicking in list box

Also compare rates to OCR
Find a Mortgage Broker

Add your company

Use map
About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com