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


Home loan rates start rising

Home loan rates start rising

Short-term mortgage rates are starting to increase following the Reserve Bank’s decision to lift the Official Cash Rate 25 basis points to 6% last week.

Leading personal finance site Good Returns ( which monitors home loan rate changes is already picking up changes.

“The general view is that floating rates will rise the same amount to around the 8.25% mark,” Good Returns editor Philip Macalister says.

After the Reserve Bank announcement small lenders ABS Canterbury and Silver Fern increased their floating rates.

ASB Bank was the first bank to move, however it has increased only its six-month and one-year rates on Friday.

Westpac was the second bank to make changes and its moves are far more sweeping and bigger. It has increased its floating rate, plus all its fixed rates from six months to three years.

Interestingly enough while it increased its standard floating rate 25 basis points the fixed rate moves were between 10 and 25 basis points.

Westpac reckons the change adds $24.05 to a monthly payment on a $150,000 mortgage on a 25-year term.

This latest RBNZ move means that floating rates are now into above average territory.

Over the past five years the floating mortgage rate has sat at 7.60%. Floating rates at 8.25% will be the highest since March 2001. (This is nothing compared to the late 1990s when the floating rate peaked at 11.25% in 1998 and in 1997 averaged 9.80% from 10.90% in 1996 and 10.80% in 1995).

While all the noise has been about the Reserve Bank's decision to increase the OCR - and what that will do for floating rates, one of the more interesting plays last week has been missed.

Early in the week HSBC dropped its two-year rate to 7.29% although no-other lender was moving their rates. Why?

“A good guess is that the bank was making a tactical play in response to Superbank entering the market and offering a “below the line” rate for 21 months of, you guessed it, 7.29%,” Mr Macalister says.

“The HSBC move is interesting as we have seen before the bank is prepared to play tactical games to pick up business,” Good Returns editor Philip Macalister says.” Also it is a clue that Superbank will be a player to watch.”

What’s the best deal at the moment? Two-year rates are still considered the best option but the cost of funding them is rising.

BNZ’s Tony Alexander says that the wholesale cost of two year money was 6.24% three months ago, it rose to 6.5% just over a week ago and is now at 6.66%. Last week Loan Plan lifted its two-year rate to 7.40%

To monitor all the mortgage rate changes as they are announced go to

© Scoop Media

Business Headlines | Sci-Tech Headlines


ScoopPro: Helping The Education Sector Get More Out Of Scoop

The ScoopPro professional license includes a suite of useful information tools for professional users of Scoop including some specifically for those in the education sector to make your Scoop experience better. More>>

Big Tax Bill Due: Destiny Church Charities Deregistered

The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations. More>>

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>


Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>


Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>