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

 

Lending Institutions Start To Trim Mortgage Rates

REAL ESTATE INSTITUTE
MEDIA RELEASE
Tuesday 10 September 2002

Lending Institutions Start To Trim Mortgage Rates


Floating mortgage rates offered by major lending institutions have been trimmed to under 8 percent according to the latest REINZ Mortgage Interest Rate Survey conducted this morning (10 September).

REINZ National President, Rex Hadley, said seven of the 18 lending institutions surveyed had eased back floating rates during the month.

“Clearly this is the result of increased competition in the marketplace, with one of the newer lenders now offering floating rates as low as 6.95 percent.

“However, despite this competitive move designed to gain market share, the other lenders still have the ability to drop rates with the Reserve Bank’s OCR remaining unchanged at 5.75 percent. As a rule of thumb, floating rates are generally based between 1.5 – 2 percent above the 90-day bank bill rate and with that currently sitting at 5.84 percent there is plenty of profitable margin for lenders.”

As at 9 am this morning, rates for first mortgages ranged between 6.95 and 7.85 percent, with all but one of the lenders surveyed sitting in a tight band of 7.60 – 7.85 percent.

Competition for business with one year rates was far more intensive with two lenders currently offering the lowest rate available of 7.05 percent. The highest one year fixed rate on offer was set at 7.25 percent.

“This ‘trimming’ effect has spread into most of the fixed rates on offer,” Mr Hadley commented. “All but four of the institutions surveyed dropped their one year fixed rate during the month.”

Similar trimming had been effected for most other fixed mortgage products on offer. Thirteen of the lending institutions surveyed had moved fixed rates downwards, over periods ranging from 6 months to five years, during the month. No increases in mortgage rates were recorded by the survey.

Rates for fixed mortgages ranged between 6.75 and 7.05 for a six month period; 7.25 – 7.45 for two years; 7.45 – 7.65 for three years; 7.55 – 7.65 for four years with five year rates set between 7.60 and 7.75 percent.

“Since we started conducting the REINZ Mortgage Survey over a decade ago, we’ve noticed a tendency among lenders to respond far more quickly to increase their rates if the OCR or 90 Day Bank Bill rate rises, than to drop them following a fall.

“It will be interesting to see how long it takes for lenders to respond to the pressure of one lender offering floating mortgages under 7 percent!”


- ends -


REINZ MORTGAGE INTEREST SURVEY AS AT 10 SEPTEMBER 2002
LENDING INSTITUTIONS FLOATING (%) FIXED – 6 Mnth (%) FIXED – 1 Year (%) FIXED – 2 Year (%) FIXED – 3 Year (%) FIXED – 4 Year (%) FIXED – 5 Year (%) FINANCE RATE
(%) MAX VAL (%) TRANSFER MORT EARLY REPAYMENT PENALTY MAXIMUM TERM (Years) FRONT END FEE
ANZ 7.85 6.95 7.20 7.40 7.55 7.65 7.70 7.88 95 + Yes Yes 30 $500 maximum
ASB 7.85 6.95 7.20 7.40 7.55 7.65 7.70 7.923 95 ± Yes Yes 30 $500
AXA New Zealand 7.69 6.95 7.20 7.40 7.55 7.65 7.70 7.757 90 Yes Yes 25 Up to $500
Bank of New Zealand 7.85 6.95 7.19 7.39 7.55 7.65 7.69 7.8718 95 Yes Yes 30 Min $250 – max $500
Cairns Lockie Limited 7.60 - 7.11 7.37 7.54 - 7.71 7.65 95 Yes Yes 25 $400
Elders Home Loans 7.65 - 7.20 7.45 7.60 - 7.80 7.70 90 Yes Yes # 25 0.25% minimum $400
General Finance Limited 7.95 - 7.20 7.45 7.60 - 7.80 8.02 95 Yes Yes 25 0.50%
HSBC 7.65 6.75 7.05 7.30 7.45 7.60 7.70 n/a 95 Yes Yes 25 Nil at present
Kiwibank 6.95 6.75 7.05 7.25 7.45 7.55 7.60 - 95 Yes Yes 30 No application fee
NZ Guardian Trust 7.55 - 7.25 - 7.60 - - 7.568 66.66 Yes Yes 20 1% maximum - negotiable
NZ Home Loans 7.70 6.95 7.20 7.40 - 7.55 7.70 7.73 95 Yes Yes 30 $250
National Bank 7.80 6.95 7.20 7.40 7.55 7.65 7.70 7.84 95 Yes Yes 30 $400 for owner occupied
Public Trust National Mortgage Unit 7.70 - 7.15 7.40 7.50 7.60 7.70 7.70 90 Yes Yes 25 Nil
Southland Building Society 7.80 6.75 7.15 7.40 7.65 - - 7.50 95 † No Yes 25 1% negotiable
Sovereign Limited 7.85 6.95 7.20 7.40 7.55 - 7.70 7.90 95 Yes Yes 30 Up to 1%
Tower Trust 7.80 - - - - - - 8.03 75 Yes No if 30 days notice given 25 1% negotiable
TSB Bank 7.70 6.95 7.10 7.35 7.55 - - 7.75 80 Yes Yes 25 $400
WestpacTrust 7.85 7.05 7.15 7.40 7.55 7.65 7.75 - 95 Yes Yes * 30 $250 max

The above information is intended as a guide only. Although the information is understood to be accurate at the date of publication, the Real Estate Institute does not itself, or on behalf of any named lending institution, represent that financial assistance will be available to any borrower on the terms noted.
† over 80% valuation required * may apply # only if repaid in first three years + with lenders’ mortgage insurance Valuation ± terms apply
All information © 2002 REINZ Comments or queries? REINZ
REINZ will not accept any responsibility should any information prove to be incomplete or incorrect.

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 



Electricity Authority: Review Of Competition In The Wholesale Electricity Market Raises Questions

In March 2021 the Electricity Authority announced it would conduct a review into competition in the wholesale electricity market. The period of the review covers the sustained elevated electricity prices since an unplanned outage at the Pohokura gas facility in Spring 2018... More>>


Government: RSI ‘State Of The Nation’ Report Published
latest research, science and innovation system report card is now available, and outlines how the system is performing, Research, Science and Innovation Minister Megan Woods has announced. “The report seeks to increase transparency, act as a reliable data source and stimulate discussion... More>>




Fonterra: Increases 2021/22 Forecast Farmgate Milk Price

Fonterra Co-operative Group Limited today increased and narrowed its forecast Farmgate Milk Price range to NZD $7.90 - $8.90 per kgMS, from NZD $7.25 - $8.75 per kgMS. The midpoint of the range, which farmers are paid off, has increased to NZD $8.40 per kgMS, from NZD $8.00 per kgMS... More>>




Pamu & Westpac: Market-leading Sustainability-Linked Loan

Westpac NZ and Pāmu have signed New Zealand’s most comprehensive Sustainability-Linked Loan to date, also the largest in the agricultural sector, and the first involving a state-owned enterprise. Pāmu, also known as Landcorp, is New Zealand’s biggest farming business. It will borrow $85m from Westpac NZ over three years... More>>


Retail NZ: Some Good News In COVID Announcements, But Firm Dates Needed

Retail NZ is welcoming news that the Government is increasing financial support for businesses in light of the ongoing COVID-19 lockdown, and that retail will be able to open at all stages of the new “Covid Protection Framework... More>>

ComCom: Companies In Hot Water For Selling Unsafe Hot Water Bottles And Toys

A wholesaler and a retailer have been fined a total of $140,000 under the Fair Trading Act for selling hot water bottles and toys that did not comply with mandatory safety requirements. Paramount Merchandise Company Limited (Paramount) was fined $104,000 after pleading guilty in the Manukau District Court... More>>