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Further Easing Of Mortgage Interest Rates Likely

March 14, 2001

After today’s statement by the Reserve Bank of New Zealand, announcing a lowering of the official cash rate by 0.25 per cent to 6.25, the Real Estate Institute of New Zealand expects mortgage interest rates to continue to ease, despite interest rates becoming more stable in the month to March 10.

National President of the Real Estate Institute, Mr Rex Hadley, said that at least one major institution had reduced its floating rate already, and others are likely to follow.

“This is excellent news for home owners, and particularly valuable to those seeking to buy their first home.

Mr Hadley said a low interest rate environment hinged on the actions of the Reserve Bank.

"I applaud the actions of Dr Brash in responding decisively to a changing global economic climate.”

As of March 10, one year fixed rates range between 7.30 - 7.99 per cent, two year rates ranged between 7.25 - 8.25 per cent while four and five year rates average around 7.84 per cent.

Floating rates ranged between 7.69 and 8.50 per cent. Only one institution reduced it's floating rate by 0.35 per cent, while four eased their floating rate by 0.25 percent.

One year fixed mortgage rates ranged between 6.95 and 7.55 per cent compared to 6.85 to 7.70 per cent last month, with some rates already within that range falling from 0.05 to 0.50 per cent.

Four institutions surveyed eased two year fixed mortgage rates, to range between 7.05 and 7.60 compared to 7.05 and 7.50 per cent last month, while three-year fixed mortgage rates ranged between 7.20 and 7.55 per cent, compared to the 7.20 to 7.60 recorded last month.

Four to five year fixed rates experienced some increases, largely due to institutions moving their longer-term rates within the 7.35 and 7.75 per cent band established last month.

Five institutions raised their five year fixed interest rates from 0.10 to 0.20 per cent, while four raised their four year fixed rates by 0.10 to 0.30 per cent.

-ENDS-

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