Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Mortgage Rates Margins Continue To Tighten

Margins Between Mortgage Rates Continue To Tighten

Lending institutions continue to trend mortgage rates on offer downwards according to the latest Mortgage Survey conducted by the Real Estate Institute of New Zealand at 9 am today (10 October).

Although only one third of the 18 institutions surveyed had lowered their floating rates during the month, the “lowering” effect was far more marked on longer term fixed term rates with most lenders moving downwards.

REINZ president, Graeme Woodley, said there was still plenty of room for lenders to manoeuvre.

“Lending institutions traditionally lend at 1.5 – 2 percent margin above bank bill rate. With Dr Bollard leaving the Official Cash Rate at 5.75 percent last week, we believe there is still room for rates to come down further.

“Over the last decade or more, since we’ve been undertaking the Mortgage Survey, we’ve noted a reluctance by lenders to move downwards relative to the cost of funds.”

As at this morning, floating rates ranged in a tight band between 6.95 – 7.85 percent.

“Although one new entrant to the market recently came in with loans as low as 6.95 percent, it would appear no other lender has seen a need to move down to meet them,” Mr Woodley said.

“Interestingly, although three other lending institutions are now offering floating rates for first mortgages at 7.55 percent, none of the major banks moved their floating rates during the month.”

For fixed terms, however, all but one lending institution lowered one year rates in the past month. These currently range between 6.75 – 7.25 percent with many moving .30 percentage points down (in September one year rates on offer ranged between 7.05 – 7.25 percent). Similarly two year rates were trimmed to range between 7.10 – 7.45 percent. Five year fixed rates also fell within a very tight band of 7.4 – 7.75 percent.

“If you look at longer term fixed rates, the outlook for homeowners is good – especially when lenders can currently offer five year rates at prices lower than their floating rate.”

Mr Woodley urged anyone considering changing their mortgages to take advantage of these lower long term rates to seek professional advice.

“With pressure on overseas economies mounting, and with our relatively healthy New Zealand economy at present, it appears we can anticipate stability in the mortgage market for some time to come.”

© Scoop Media

Business Headlines | Sci-Tech Headlines


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news