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Mortgages

Mortgage Rates Daily Commentary
Tuesday 2 June 2020  Add your comment
Lending policies changing rapidly; TSB price match

Bank lending policies are changing at their fastest rate since the GFC, with huge variations between major lenders, according to one Auckland adviser: [READ ON]

No new rate changes today, but in case you missed it last week, TSB has vowed to match any home loan rate from the big four banks: [READ ON]

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Time to fix or stick to floating rates?

Although the traditional response to rising interest rates is for mortgage borrowers to flock to fixed rate loans, that’s not the best move for all but a few, says William Cairns of mortgage banker Cairns Lockie.

Friday, April 19th 2002, 5:28PM

by Jenny Ruth

The few who should be opting for fixed rate mortgages are those with relatively large mortgage payments relative to their income who have the most need for certainty of outgoings, he says.

But everyone else should just forget it and stick to floating rate mortgages.

That’s because now the Reserve Bank has inflation much more under control than it did in the early 1990s, the peak in interest rates will be much lower than previously. In that environment it’s hard to make substantial savings from fixed rate loans and, in fact, most people on fixed rate loans will end up paying more than if they were on floating rates, Cairns says.

The Reserve Bank may well raise its official cash rate another percentage point or so from the current 5.25% level, but it won’t go much higher than that. What’s more, the expected rate rises are already factored in to fixed rate mortgages, he says.

Cairns Lockie is currently offering a 6.8% variable rate home loan and an 8.1% two-year fixed rate loan.

"If you fix for two years, from day one you’re paying 8.1% but it might take six months for the variable rate to go to 8.1%," Cairns says.

And after that, "if you’re on a floating rate and the economy starts to ease (and the central bank does too), you will get the interest rate relief immediately," he says.

There are other drawbacks to fixed rate loans such the penalties you have to pay if you sell your house within the fixed term.

The other day, he had a couple with a joint income of $100,000 and a mortgage of $100,000 asking about fixed rate loans. "What’s the point. They may as well take the risk," Cairns says.

« Reserve Bank raises OCR to 5.25%Real Estate Institute figures »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.29 3.45 3.85
ANZ Special - 2.79 2.95 3.35
ASB Bank 4.45 3.35 3.19 3.85
ASB Bank Special - 2.85 2.69 3.35
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 2.79 ▼2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼3.39 ▼3.29 ▼3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 2.80 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.80 2.89 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 4.40 2.95 2.95 3.69
Kainga Ora 4.43 ▼3.29 ▼3.39 ▼3.85
Kiwibank 4.40 3.74 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 2.65 2.79 3.25
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 3.75 3.99 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 3.49 3.45 3.39 3.69
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 2.99 3.05 3.69
The Co-operative Bank - Owner Occ 4.40 ▼2.79 ▼2.95 ▼3.39
The Co-operative Bank - Standard 4.40 ▼3.29 ▼3.45 ▼3.89
TSB Bank 5.34 3.59 ▼3.59 4.19
TSB Special 4.54 2.79 ▼2.79 3.39
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.79 ▼2.69 ▼2.79
Median 4.55 3.32 3.39 3.69

Last updated: 28 May 2020 10:38am

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