Lenders tweak rates
The latest survey of interest rates confirms that fixed rates have been edging up and floating rates have remain unchaged in the past month.
Monday, April 14th 2003, 9:51AM
Floating mortgage interest rates remained completely unchanged in the month to April 10, while fixed rates edged slightly upwards as the majority of lending institutions ‘tweaked’ their fixed rates, according to the latest mortgage interest rate survey conducted by the Real Estate Institute of New Zealand.
REINZ national president, Graeme Woodley says that many lending institutions had amended their one to five year fixed rates over the 30 days to April 10, but these movements tended to be minor adjustments that did not greatly affect the overall range of the rates on offer.
Although seven of the 17 institutions surveyed raised their fixed rates between 0.05 and 0.46%, five had lowered their fixed rates by 0.04 and 0.30%.
“The result is not dissimilar to rearranging deckchairs – there’s still the same number of seats. The overall range of rates on offer has remained remarkably static, given the number of rate changes.”
Woodley says this fine-tuning was more the result of competitive positioning by the banks, as opposed to delivering tangible benefits to homeowners.
“The small upward movement in the higher range of the fixed rates on offer has had little or no effect on the affordability of homes, as the lower range of rates remains basically static, it merely reflects the banks efforts to remain within competitive reach of each other.”
“While there has been an movement in the upper range of fixed rates of 0.10 – 0.20%, there appears evidence that any changes have merely represented a realignment of rates between institutions. For example, while at least one 1-year fixed rate was increased by as much as 0.46%, the over all range was 6.45 – 6.95%, compared to 6.4 – 6.95% in the month to March 10. “
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