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

 


Superhomeloan Offers Welcome Alternative

1 November 2004

Superhomeloan Offers Welcome Alternative In Mortgage War

Research shows consumers worry about paying too much over a fixed term – while industry belief that OCR is at top of interest rate curve may prove them right

WELLINGTON, 1 November 2004 – Superbank today continued its campaign to bring innovation to the banking industry by announcing a guaranteed variable rate option to SuperHomeloan. The new mortgage combines the best of both mortgage worlds – offering the flexibility and ‘no strings’ nature of a heavily discounted variable rate combined with a guaranteed maximum rate of 7.49 per cent until May 31 2005.

This means that even if the official cash rate (OCR) were to rise in the next six months, Superbank would guarantee no increase on the 7.49 per cent interest rate. However, it is widely thought that the OCR has reached its peak and may start to go down over the next year. If this becomes the case Superbank’s new loan, unlike a fixed term loan, would also fall, reducing customers mortgage costs.

Research commissioned by Superbank shows some consumers are concerned about taking fixed-term mortgages at present, believing rates may soon start to fall leaving them with higher costs. The survey showed 38.5% of people expect the interest rate to rise a little, then drop off later in the year, while 15.5% are most concerned about paying too much when rates fall. Superbank believes that offering a guaranteed low variable rate of interest until June 2005 is compelling, allowing consumers to reassess their options at any point in the interim in light of the prevailing interest rate environment.

“The guaranteed variable rate helps people better manage their risk rather than attempting to avoid it, which of course is impossible. We are offering fixed-rate certainty without the long-term strings,” says James Munro, chief operating officer of Superbank. “Everyone ideally wants to fix at the bottom of the market – not at the top. As a number of market commentators have observed, with the cost of fixed rate loans starting to fall it is questionable as to whether a two-year fixed mortgage is the most sensible option at this point.”

“Our research shows that people want options. Superbank is committed to delivering market innovations that offer these options in a way that assists people in managing their risk. Superbank provides its customers with choices rather than simply trying to corral them into the discount of the day. If our customer wants a hot two-year rate, we will provide it. If they want to manage their risk more actively though this product, we will provide it.”
The research also shows that women tend to be more practical than men when it comes to mortgage issues. Women are twice as likely (10 per cent) than men (5.5 per cent) to be most concerned about feeling short-changed when stuck on a high fixed rate. Men tend to be more influenced by fears of big rate rises, even if they don’t expect those rises to actually happen.

Consumers nationwide can get information about this new offering from Superbank’s website (www.superbank.co.nz) or by calling free on 0508 226 546. SuperHomeloan is distributed through Superbank mobile managers, direct by phone and through six leading mortgage brokerages; Mike Pero Mortgages, Mortgage Choice, Mortgage Express, Mortgage Link, Mortgage People and Ray White Financial Services.

More from the Superbank Home Loan Research Nationwide telephone research by New River polled 482 people over the age of 18 in early October. Other interesting findings included:

While 38.2 per cent of people currently have a mortgage, 3.3 per cent are still planning to get a mortgage in the next six months despite the uncertainty 48 per cent expect interest rates to keep rising over the next year, while 38.5 per cent believe that the rate will rise a little further and then drop. Nobody believes rates will fall The threat of a big rate rise looms largest as the main concern for 40 per cent Expectations and feelings on interest rates often run in conflicting directions. For example, 40 per cent of people who think rates will drop in the future still plan to fix their mortgage. Conversely, 15 per cent who expect rising rates are also some of the most concerned about paying too much if they fix and interest rates subsequently go down For 15.5 per cent, being stuck on a fixed term while rates fall worries them the most

About Superbank: Superbank is the trading name of St.George Bank New Zealand Limited. Superbank is a joint venture between Foodstuffs New Zealand and St.George Bank Ltd of Australia. St.George Bank Australia is a listed company in Australia and has assets of over AUD $55billion. The Foodstuffs group of companies (New World, Pak 'N Save, Write Price and 4 Square) is the 4th largest trading organisation in New Zealand. People can open an account very simply: by calling 0508 226 546 or by picking up an application form from a supermarket and posting it in.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: 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>>

ALSO:

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>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news