Floating Rates Stable, Fixed Continue To Firm

January 21, 2002

Floating Rates Stable, Fixed Rates Continue To Firm - REINZ

Fixed mortgage interest rates have continued to rise in the month to January 10, the majority firming fixed rate on offer rates by 0.20 to 0.50 per cent, according to Mr Rex Hadley, National President of the Institute.

Having eased sharply in the month to December 10, floating rates remained almost completely unchanged this month. The single institution that altered it’s floating rate dropped it by 0.20 per cent, meaning floating rates now range between 6.24 and 6.70, compared to 6.24 and 6.90 per cent last month.

Mr Hadley said that the movement in fixed rates was small and indicated that interest rates were beginning to stabilise.

He said, “The increase in fixed rates has been relatively insignificant and seems to indicate the lending institutions are seeking to set rates at a more natural level than the recent historical lows. The Institute does not expect rates to continue to increase through out 2002, rather the larger economic picture is that of a stabilising interest rate environment.

“The major driver of interest rates, the Official Cash Rate, is expected to remain unchanged at it’s next review on January 23rd, offering further weight to our belief that 2002 will be ‘steady as she goes’.”

As of January 10, one year fixed rates range between 5.90 and 6.75 per cent, compared with 5.85 and 6.75 per cent to September 10; two year rates range between 6.35 and 7.20 compared to 6.49 and 7.01per cent last month; three year fixed rates range between 7.00 to 7.65, compared to 6.95 to 7.44 per cent last month; while four and five year rates range between 7.49 to 8.05 per cent, compared to 7.35 to 7.85 per cent last month.

-ENDS-

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