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


That’s all folks – OCR increases for 2014

That’s all folks – OCR increases for 2014

"Today's announcement by the Reserve Bank should be the last of the bad news for this year.

The expected increase of 0.25% has taken the Official Cash Rate to 3.5%. Most banks are already increasing their lending and investment rates. Floating rates with the major banks look likely to re-establish at between 6.25% and 6.50%.

Most economic and financial sources believe today’s adjustment is the end of a series of hikes with the economy looking like it’s falling into line with the Governor's expectations.

Interest rates have been at their lowest for decades but now we are in an era of small and steady increases. 2015 may see some more minor adjustments.

What does this mean for the average homeowner in New Zealand? It means if you have a $200,000 mortgage against your home then the interest component may end up costing you an extra $9.62 a week. If you're at $100,000 then you're in for half that amount or in real terms just a bit more than a large coffee a week.

We could all get 'up in arms' over the increases but let's be honest, it shouldn't break the bank and it’s going to be more about careful budgeting than selling up. I believe the national economy is in good shape and we've come a long way since the GFC and the ugly years of 2008-2012. I can still recall the 1980s and interest rates of 3-4 times what they are now so I still believe home ownership is sensible and affordable. First home buyers should not be deterred – it’s likely that 90% lending ratios may be back in, on a larger scale, later in the year and that in itself will bring more positive news and will be far more influential than the recent interest rate increases."

Mike Pero
Founder of Mike Pero Mortgages and Mike Pero Real Estate

© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news