All Topics / Overseas Deals / NZ interest rates-news story

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  • Profile photo of westanwestan
    Join Date: 2002
    Post Count: 1,950

    This story from NZ may interest some of you

    regards westan

    Floating Rates May Go Even Higher
    Janine Ogier – Good ReturnsReserve Bank of New Zealand governor Alan Bollard took another swipe at mortgage lenders and Kiwi borrowers in a speech last week, which re-emphasised the high chance of an official rate hike next month.

    Following on from his blatant comments when he raised the cash rate to 7% less than a fortnight ago, Bollard took aim at the housing market and Kiwi spenders as the main driver of demand and ingredient in inflation pressures. He is hammering home his message, but it may take floating rates to be a bit higher in the 9% range before the appetite for borrowing and spending is somewhat subdued.

    The vehement rhetoric has the market gauging a further tightening move is on the cards, even if the economic picture looks like switching in the latter half of next year and an easing cycle beginning then.

    “The Reserve Bank seems to be on a campaign of clearly articulating their worries about the problems facing the New Zealand economy,” ANZ chief economist John McDermott says.

    “We now expect a 25-basis-point hike in December and the door to be left open for January,” he says.

    The financial market is pricing in an 80% chance of a hike in December, which could prove too tempting for the RBNZ to ignore.

    “The message to the leaders of the mortgage price war is simple. If you want to play the price game to drive volumes, then the RBNZ is going to stomp on volume growth as well through higher front-dated rates,” McDermott says.

    Many lenders moved their floating rates higher over the week and fixed mortgage rates still showed a double-digit number of increases.

    Twenty-nine lenders raised variable rates, which range from Silver Fern’s 7.85% to NZ Mortgage Trust’s 9.50%.

    One-year rates now vary from the 7.60% offered by Southern Cross to 8.90% from GEM Home Loans and there were 16 rises.

    For two-year fixed terms, Loan Plan’s 7.55% sets the lowest mark and the rates vary up to Headstart’s 8.75%, with 16 increases again.

    Three-year rates range from the 7.55% offered by Loan Plan to Headstart’s 8.6% and there were 15 revisions upwards.

    In the five-year part of the market, rates vary from 7.40% offered by Housing Corporation and Loan Plan to Gem Home Loans’ 8.40%, while 13 moves higher were recorded.

    In contrast to the rest of the home loan market, Resi put all its rates down a few basis points.

    For a list of mortgage rates visit,,13276,00.html

    Regards westan

    Properties in the USA 15-25% returns- email to join our database [email protected]

    Profile photo of CastleDreamerCastleDreamer
    Join Date: 2003
    Post Count: 288

    thanks Westan,
    there has been an amazing amount of discussion re interest rates. i know that i for one am considering fixing up a few more of my NZ loans, probably for a year or two at most. I personally dont like to fix for five years or more. I dont have a crystal ball, and dont want to try to predict that far ahead as to what the markets will be doing.

    Find out more about New Zealand investing… go to

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