Mortgage Interest Rates Rise As Predicted

News Release February 10, 2000

Mortgage interest rates rise - as predicted

The majority of lending institutions announced an increase in both their floating and fixed interest rates in the month to February 10, according to the latest survey conducted by the Real Estate Institute of New Zealand.

Floating rates, which now range between 6.50 and 7.60 per cent, compared to the 6.50 to 7.25 per cent available in the month to January 10, 1999.

One year fixed rates now range between 6.85 and 8.50 per cent, a half per cent increase from the 6.85 to 8.0 per cent of last month. Five year fixed rates now range between 8.70 and 9.35 per cent, while fixed two, three and four year mortgage rates now range between 7.75 and 9.15 per cent.

“The Official Cash Rate having risen from 5.0 to 5.25 in the last Reserve Bank review, these increases are not at all surprising.” says Mr Max Oliver, National President of the Real Estate Institute.

“The impact of the raise in the OCR, while anticipated, is extremely hard on the New Zealand home owner, who is presently carrying the burden of the drive for lower inflation. While the current attitude of the Reserve Bank is that it is better to ‘move moderately and early, than aggressively and late’ most New Zealanders would presently be hard pushed to tell the difference.”

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