Fixed Rates Fine-tuned while Floating Rate stable
Fixed Rates Fine-tuned while Floating Rate remains stable
Floating mortgage interest rates remained completely unchanged in the month to April 10, while fixed rates edged slightly upwards as the majority of lending institutions ‘tweaked’ their fixed rates, according to the latest mortgage interest rate survey conducted by the Real Estate Institute of New Zealand.
REINZ National President, Graeme Woodley said today that many lending institutions had amended their one to five year fixed rates over the thirty days to April 10, but these movements tended to be minor adjustments that did not greatly affect the overall range of the rates on offer. Although seven of the seventeen institutions surveyed raised their fixed rates between 0.05 and 0.46 per cent, five had lowered their fixed rates by 0.04 and 0.30 per cent.
Mr Woodley said, “The result is not dissimilar to rearranging deckchairs – there’s still the same number of seats. The overall range of rates on offer has remained remarkably static, given the number of rate changes.”
According to Mr Woodley, this fine-tuning was more the result of competitive positioning by the banks, as opposed to delivering tangible benefits to homeowners.
He said, “The small upward movement in the higher range of the fixed rates on offer has had little or no effect on the affordability of homes, as the lower range of rates remains basically static, it merely reflects the banks efforts to remain within competitive reach of each other.”
“While there has been an movement in the upper range of fixed rates of 0.10 – 0.20 per cent, there appears evidence that any changes have merely represented a realignment of rates between institutions. For example, while at least one 1-year fixed rate was increased by as much as 0.46 per cent, the over all range was 6.45 – 6.95 per cent, compared to 6.4 – 6.95 in the month to March 10. “
As of April 10, one year fixed rates range between 6.45
and 6.95 per cent, compared with 6.40 and 6.95 per cent to
March 10; two year rates range between 6.75 and 7.10
compared to 6.75 and 6.90 per cent last month; three year
fixed rates range between 6.85 to 7.25, compared to 6.85 to
7.10, per cent last month; while four and five year rates
range between 6.90 to 7.45 per cent, compared to 6.95 to
7.25 per cent last