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Mortgage Rates Commentary

Politicians and interest rates

Sunday 20th of November 2011

We received a letter from National Party leader John Key the other day intoning us to vote for his party this weekend. The first reason he said we should vote for his party was that it would "Lower mortgage rates, leaving more money in your pocket."

The second part is right, lower mortgage rates mean more money in your pocket. But the first is rubbish. The government doesn't set interest rates. We have an independent Reserve Bank and trading banks can do what they like with pricing. Secondly anyone with a basic understanding of economics knows interest rates are low when the economy is weak. Key promises a strong economy and low interest rates.

Does anyone else get annoyed with this misleading advertising?

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Latest Comments
FMA wants clearer fees
@first time caller - I can see the complexity you highlight, but as above, investors should be able to see what they are paying without having to reference multiple documents. Investment admin can track and report deductions for tax, withdrawals, fees et al, would be /should be straightforward to aggregate advice fees into costs at member level... at least I hope so.
1 day ago Goldcard
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@goldcard - how would you propose that a fund manager calculates the TER to include adviser fees given not all clients pay them and different advisers charge different fees, not to mention some advisors charge different fees to different clients? The advice fee gets disclosed in the adviser's disclosure statement and the statement of advice, so the client can add that to the published TER of the fund they are invested in to see how much they are paying overall.
1 day ago First time caller
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Schedule 4 of the FMCA regs 2014, particularly clauses 2(1) and 53(3) provide the basis for excluding individually charged advice fees from the statutory TER. This was introduced with the best of intentions, but now it is little more than an invisibility cloak for deductions from member accounts.
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