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Mortgages

Mortgage Rates Daily Commentary
Friday 1 November 2024  Add your comment
Rise in households struggling with mortgage repayments; RBNZ: house prices still near top of sustainable levels

Mortgage arrears continue to rise but are still low by historical levels. [READ ON]

The Reserve Bank says house prices remain near the top of its estimate of sustainable levels and remain “a stretch” for many would-be buyers. [See here]

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Lower OCR around corner

More interest rate cuts are probably on the way, the Reserve Bank has signalled.

Wednesday, October 12th 2016, 6:00AM 1 Comment

Assistant Governor John McDermott told a meeting of the Bay of Plenty Employers and Manufacturers Association that inflation was expected to rebound in December and be at the bottom of the bank’s 1% to 3% target range.

New Zealand was being affected by international drivers, he said.

“There are several reasons for low inflation – both here and abroad. In New Zealand, tradeables inflation, which accounts for almost half of the CPI regimen, has been negative for the past four years,” he said.

“Much of the weakness in inflation can be attributed to global developments that have been reflected in the high New Zealand dollar and low inflation in our import prices. Strong net immigration and increased labour market participation have also boosted the supply potential of the economy, meaning that New Zealand has been able to grow at a robust pace without generating significant inflation.”

He said there also seemed to have been changes in the way inflation was generated in New Zealand and the bank would monitor developments an investigate any persistent changes.

More interest rate cuts would probably be necessary, he said.

“As described in the September OCR review, monetary policy will continue to be accommodative. Interest rates are at multi-decade lows, and our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range.”

McDermott said monetary policy had a long lag time, which was why the Reserve Bank had to target inflation a couple of years out. Lowering interest rates would not do much to change inflation in the near term, he said.

ASB’s economists said they expected a 25 basis point rate cut in November.

Tags: OCR OCR forecasts

« Tough lending times for investorsInflation result won’t stop OCR cut »

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Comments from our readers

On 12 October 2016 at 10:41 am Winka said:
Ah yes,however, be reminded (as I have written in the past) that a continuing reduction in the OCR is not mimicked in parallel with a related reduction in mortgage rates.
The fact is that the OCR arrives at a point that mortgage rates actually rise!
This factor is due basically to bank 'margins', and from where banks source money which they can lend (mortgages), and one relevant source is from depositors funds.
We can work out the basics behind this?

So, as I have alluded to previously, let's see what effect this mortgage rate rise is going to have on house buyers...for a start.
Notice the red mortgage rates in the MRC in the last few weeks.
And, what happens in America has an overflow in NZ?
Watch this space.

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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 8.90 7.00 6.50 -
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 ▼6.39 ▼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 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼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 6.17 5.79 5.69

Last updated: 30 October 2024 9:36am

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