Floating Rate Sinks For New Zealand Home Loans
New Zealand Home Loans
In a move today (7 March 01) that preempts an industry-wide review of floating rates, New Zealand Home Loans, this country’s largest non-bank provider of home loans, announced a reduction in its floating rate to 7.95%.
“A 0.35 percent reduction in the floating rate of an average loan will save a customer over $500 in annual interest costs. That’s money that can be used to become debt-free faster or put aside for a rainy day” said New Zealand Home Loans Director, Murray Ferguson.
“New Zealand Home Loans has been a force for change in the residential mortgage market, so we expect to see some further movement in floating rates,” he said
While fixed term interest rates have been falling in recent months, movement on the floating rate market has been intermittent with the major banks still well over 8%.
2001 is shaping to be positive for New Zealand homeowners.
Figures released by the Real Estate Institute showed a $5000 jump in the national median sales price for January 2001, up over 3% on the same time last year.
This is the highest national price recorded for any January since 1996, the year the survey began. January also boasted an increase in settlements over the previous month with 4,741 house sales recorded nationally.
Industry experts are however warning that the improvements in the housing market are likely to remain modest throughout 2001 and that expedient debt reduction is more effective than relying on capital gains.