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Mortgage Rates Daily Commentary
Wednesday 20 August 2014  Add your comment
Pretty benign economic news

The pre-election economic update from Treasury yesterday had no big surprises and appears to have done little to change any forecasts around future interest rate moves. Perhaps the more important release was the Reserve Bank's survey of inflation expectations. As usual, the big focus was on respondents’ views on annual CPI inflation. For the year ahead these eased from 2.08% to to 1.96%, while the forecast for two years ahead was moderated from 2.36% to 2.23%. This put the one-year view close to the mid-point of the RBNZ’s 1.0 to 3.0% target range, while the two-year view was still riding a bit above this.

The only home loan rate changes today are little ones to Housing New Zealand's offers.

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Sovereign drops floating rate

Paul Bravo, Director of Sovereign Financial Services Limited, announced today that Sovereign would be dropping its floating home loan interest rate to 7.5% pa, which continues to undercut other major lenders.

Thursday, May 17th 2001, 3:51PM

Sovereign drops floating rate, predicts fixed rates will begin to rise.

Paul Bravo, Director of Sovereign Financial Services Limited, announced today that Sovereign would be dropping its floating home loan interest rate to 7.5% pa, which continues to undercut other major lenders.

"While there may be a further cut in the Official Cash Rate, I think we are nearing the bottom of the interest rate cycle," Bravo said.

"With one-year fixed rates available at up to 1% pa below some floating rates, now could be a good time for borrowers with floating rates to consider fixing a portion of their loan.

"Many lenders are pricing fixed rate loans aggressively low to attract new customers, but bargain rates are unlikely to last long. Fixed rate margins are getting very tight and I pressure will start to mount for them to rise."

Bravo suggested borrowers should consider the option of splitting their loan between a floating and fixed rate.

"Fixed rates loans have limited flexibility. If you sell your house and need to repay the loan within the fixed term you may be charged an early repayment penalty, which can get quite large. There are also quite strict limitations on increasing your repayments or making lump sum payments.

"For this reason we recommend that people who take out a fixed loan should leave a portion of their loan on a floating rate. This gives them the benefits of the fixed rate loan, while still being able to make additional payments and redraw funds on the floating rate portion.

"Sovereign has long encouraged its customers to split their loans. However, in the wider market surprisingly few borrowers actually do it."

« The time is near for capped rate loansHousing market bottomed: RBNZ »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AMP Home Loans 7.24 5.99 6.39 6.65
AMP Home Loans $200k+ 7.14 5.89 6.29 6.55
AMP Home Loans LVR <80% - - 5.85 6.29
ANZ 6.74 6.05 6.49 6.65
ANZ LVR > 90 6.74 6.55 6.99 7.15
ANZ Special - - 5.99 -
ASB Bank 6.75 6.09 6.40 6.65
ASB Bank Special - - 5.99 -
BankDirect 6.75 6.09 6.99 6.65
BankDirect Special - - 5.99 -
BNZ - Classic - - 5.99 6.25
Lender Flt 1yr 2yr 3yr
BNZ - GlobalPlus 6.74 5.99 6.39 6.59
BNZ - Mortgage One 7.15 - - -
BNZ - Rapid Repay 6.74 - - -
BNZ - Std, FlyBuys 6.74 5.99 6.39 6.59
BNZ - TotalMoney 6.74 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.45 5.90 6.50 -
Credit Union North 6.45 - - -
Credit Union South 5.75 - - -
eMortgage 6.04 6.15 6.69 7.19
Finance Direct 6.10 6.45 6.69 7.10
Lender Flt 1yr 2yr 3yr
First Credit Union 6.45 - - -
General Finance 5.95 6.25 6.50 7.10
HBS Bank 6.15 5.85 5.99 6.25
HBS Special - - - 5.95
Heartland 6.45 6.75 7.00 7.60
Heretaunga Building Society 6.25 5.85 6.50 -
Housing NZ Corp ▲6.74 ▼5.99 ▼6.19 6.60
HSBC Premier 6.84 5.95 ▼5.95 ▲6.55
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.75 5.99 6.39 -
Lender Flt 1yr 2yr 3yr
Kiwibank 6.40 5.99 6.39 6.65
Kiwibank - Capped 5.65 6.50 - -
Kiwibank - Offset 6.30 - - -
Kiwibank LVR > 80% - - 5.99 -
Liberty 5.64 - - -
Napier Building Society 5.80 6.00 6.70 -
Nelson Building Society 6.95 6.15 6.60 -
NZ Home Loans 6.85 6.09 6.40 6.65
Perpetual Trust 7.70 - - -
RESIMAC - lo doc 7.59 7.06 7.38 7.82
RESIMAC LVR < 80% 6.59 6.06 6.38 6.82
Lender Flt 1yr 2yr 3yr
RESIMAC LVR < 85% 7.59 7.06 7.38 7.82
RESIMAC LVR < 90% 8.59 8.06 8.38 8.82
SBS Bank 6.15 5.85 5.99 6.25
SBS Bank Special - - - 5.95
Silver Fern 5.95 6.10 6.55 7.05
Sovereign 6.85 6.09 6.40 6.65
Sovereign Special - - 5.99 -
The Co-operative Bank 6.70 6.00 6.00 6.25
TSB Bank 6.74 6.00 6.19 6.60
TSB Special - - 5.80 -
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 6.59 6.09 6.39 6.65
Westpac - Capped rates - 6.74 6.99 -
Westpac - Offset 6.59 - - -
Westpac Special - - 5.99 -
Median 6.70 6.06 6.39 6.65

Last updated: 20 August 2014 11:36am

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