No such thing as a cheap home loan
There's probably no such thing as a cheap home loan at the moment. The general view is that, historically, any rate below 7.5 per cent is a reasonable deal.
Tuesday, November 15th 2005, 1:19AM
by The Landlord
Right now, none of the lenders offering standard rates have anything below that level. Variable, or floating rate, home loans have hit 9.25 per cent following the Reserve Bank's decision to hike the official cash rate from 6.75 per cent to 7 per cent.Fixed rate home loans from the banks are around the 8 per cent mark and look like getting higher. The bad news is that in the short-term, rates are only expected to head higher.
The other major talking point in the home loan market has been Reserve Bank Governor Alan Bollard's speeches about the economy. He has hit out at these foreign-owned banks for their alleged profiteering and their cheap home loans. However, he has missed out one important point.
The bank that has arguably been the most aggressive in terms of pricing has been none other than the government-owned Kiwibank.
What's the best deal at the moment? The answer, unfortunately, is that there aren't any.
Variable rates range from a low of 8.30 per cent at Superbank up to 9.50 per cent, with most banks at the high end at 9.25 per cent.
Five-year rates go from 7.40 per cent up to 8.40 per cent with the banks being in the lower half of that range at 7.75 per cent.
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