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Eyes turn to RBNZ announcement

Weekly home loan report: Fixed term rates have edged higher still over the last week, even though the expected Reserve Bank official cash rate increase is not due until Thursday.

Tuesday, December 6th 2005, 6:54AM

by Janine Ogier

Lenders will push floating home loan rates up in reaction to any rate hike on Thursday and fixed rates will follow them.

Since October when RBNZ governor Alan Bollard promised more tightening unless there was a noticeable moderation in housing and consumer spending, there has been little to stay his hand.

Some measures of weaker consumer confidence and quietening business spending intensions have come to light, but inflation expectations continue to rise, businesses are struggling to fill positions, the housing market is still buoyant and people are borrowing left, right and centre.

Most commentators forecast a 25-basis-point increase when the monetary policy statement is released at on Thursday, but there’s a chance of a 50-basis-point hike.

The statement will be dissected for hints on what further tightening may be in store early in 2006 and whether the recent hawkish tone of central bank rhetoric continues.

Presently, market players are reluctant to give a January hike much credence, but that can quickly change once Bollard’s comments are added to the forecasting mix.

“One could not rule out a 0.5% move on Thursday but the RBNZ would need to weight the kick in the head of the consumer factor against the risk of pushing the economy into a recession next year,” Bank of New Zealand chief economist Tony Alexander says.

“We suspect the RBNZ will not stop depressing the brake until solid spending decline evidence is in hand. Hence, the risk of a January 26 OCR rise will remain open, though at less than 50% probability,” he says.

Variable rates were stable in the last week ahead of Thursday’s announcement, but some lenders moved fixed home loans further up.

Lenders announcing changes only made double figures in the two-year section of the market.

One-year rates still range from the 7.60% offered by Southern Cross to 9.10% from GEM Home Loans.

For two-year fixed terms, Housing Corp.’s 8.0% sets the lowest mark and Headstart’s 8.95% records the top. There were 11 revisions higher.

Three-year rates vary from the 7.95% offered by Housing Corp. to Headstart and Westpac’s capped rate of 8.85%. There were seven changes upwards.

In the four-year rates, four lenders hold the lowest position – Mortgage Finance, Loan Plan, Kiwibank and PSIS – at 7.95%, while New Zealand Mortgage Funds offers 8.36% at the top of the range. Four lenders increased rates.

For five-year fixed loans, the 7.07% offered by Housing Corporation, Kiwibank and Mortgage Finance marks the most attractive rate, while Gem Home Loans’ 8.6% is the highest.

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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 7.49 5.65 5.55 5.55
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 6.02 5.79 5.69

Last updated: 20 November 2024 9:45am

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