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Fixed Mortgage Rate Rises Grind To A Halt

Fixed Mortgage Rate Rises Grind To A Halt

The much vaunted rise in mortgage interest rates following the recent Official Cash Rate increases, ground to a halt in January, according to the latest Blue Chip Financial Solutions (NZ) Limited, Mortgage Interest Rate Survey.

Most fixed term rates reduced as banks carried out a realignment, although floating rates rose, fixed rates from two to five years were mostly lower.

Floating rates increased by between 0.20 and 0.30 per cent with the five major banks all offering the highest rate of 9.55 per cent floating, while the lowest mortgage interest rate in the survey is Kiwibank with a rate of 7.8 per cent for five years fixed.

This month the cost of a mortgage for a notional one year fixed term mortgage, based on the average of rates offered by the five major trading banks remained static at $867.19 per month.

“It looks like a soft month for residential property sales during December has had an impact on bank lending levels and the banks have had to pull rates back accordingly to try and stimulate demand. However with the next Official Cash Rate announcement due on Thursday, the Reserve Bank will most likely be keen to continue to dampen demand for residential property based borrowing”, according to Blue Chip Financial Solutions, Chief Executive, Mr Jonathan Woodhams.

Mr Woodhams said the lifting of floating rates was probably the best indication of bank expectations of what the Reserve Bank would do on Thursday.

Floating rates saw the greatest increase with an average rise of 0.28 per cent across the majority of lenders. The major trading banks sat uniformly at 9.55 per cent, while Tasman Mortgages continued its competitive offering with the lowest floating rate of 8.60 per cent.

Six month rates remained relatively static with only three increases. The major lenders averaged from 8.45 to 8.75 per cent. TSB continued to offer the lowest rate of 8.40 per cent, closely followed by BankDirect, Kiwibank and BNZ on 8.45 per cent.

In the competitive one year fixed mortgage market, rates remained relatively unchanged, with the major lenders ranging from BNZ at 8.45 to ANZ, ASB, National and Westpac all offering 8.50 per cent. Public Trust offered the lowest rate at 8.30 per cent, followed by TSB on 8.40 per cent.

Two year fixed terms saw a decrease in rates from eight lenders on average of 0.21 per cent. BNZ narrowly took the lead from BankDirect offering the lowest at 7.99 per cent, with the rest of the major banks on 8.15 – 8.30 per cent.

Three year rates continued to produce the greatest competition amongst the lenders with the majority of lenders lowering their rates. BNZ continued its competitive pitch offering the lowest rate at 7.99 per cent, a drop of 0.26 per cent from last months offering of 8.25 per cent. ANZ, BankDirect, National Bank and SBS followed closely at 8.00 per cent.

Four year rates remained relatively unchanged, with eight of the banks surveyed remaining static from last month. BNZ took the lead again offering the lowest rate at 7.99 per cent closely followed by TSB at 8.00 per cent and the major banks at 8.05 – 8.15.

In five year rates Kiwibank held the lead at 7.80 per cent, followed by Bank Direct and BNZ at 7.90 per cent and the major banks at 7.90-8.00 per cent.


About Blue Chip Financial Solutions Limited

Blue Chip Financial Solutions Limited assists its clients in structuring their finances through a combination of financial services, risk management and investment products. In 2004 the company was listed on the NZX.

Operating subsidiaries include Blue Chip Financial Solutions Limited, Blue Chip Financial Services Limited, Blue Chip Homes Limited, Auckland Residential Tenancies Limited, ART Apartments Limited and Bribanc Property Group Limited.

Its Board of Directors comprise Independent Chairman, Jock Irvine, Managing Director and company founder, Mark Bryers, with Jim Bracknell, Rt. Hon. Wyatt Creech and Hon. John Luxton QSO serving as Independent Directors.

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