20 September 2004
Memo to home loan customers: fix, fix, fix
There are some things you just have to do around the house; the washing; the dishes, and the vacuuming. Here’s one more thing to add to the list; fix your home loan.
Bank of New Zealand has announced an increase in its variable home loan rate, from 8. 25 % to 8.50 %, but has held its 12-month and two-year fixed rates at its already low levels, in the face of increases by most competitors.
Andrew Whitechurch, Bank of New Zealand’s general manager of business development and strategy, says the Reserve Bank has not finished increasing rates and home loan customers should fix their home loan rate – and fix quick.
“We’re predicting further official cash rate rises by the Reserve Bank this year, with interest rates potentially getting as high as 9%. We advise customers to fix home loans in the current environment and are doing all that we can to hold the popular one and two-year terms as low as possible for customers.
“Our two-year rate fixed rate home loan at 7.40% is the lowest of all the major lenders, and with further increases in the floating rate expected in the short to medium term, fixing for two-years is a safe bet,” says Mr Whitechurch.
Bank of New Zealand’s increase in its variable home loan rate reflects a rise in the cost of borrowing for the bank. On Thursday 9 September, the Reserve Bank raised the official cash rate from 6.00 % to 6.25 %. Westpac were the first to raise their variable interest rate to 8.60%. ASB and National Bank both moved to 8.50% respectively.
Bank of New Zealand also announced an increase in its six month fixed interest rate, from 7.35% to 7.50% but remains the lowest or equal lowest among major banks across most fixed rate terms.