Mortgage decisions held off due to election
Weekly home loan report: Hurricane Katrina and its lasting inflationary impact on world and New Zealand financial markets is the key concern presently, against a backdrop of the spring mortgage campaign season getting underway.
Tuesday, September 6th 2005, 6:28AM
by Janine Ogier
Next week’s Reserve Bank of New Zealand monetary policy statement and the general election are also in the front of people’s minds.
The Reserve Bank is bound to comment on the effect soaring oil prices, exacerbated by Hurricane Katrina in the US south last week, will have on the world and domestic economies as the markets wait to see if the US Federal Reserve holds off on raising rates later this month. It’s a dilemma as the local policymakers juggle short-term worries about inflation against concerns for growth back home and the potential for lower official interest rates.
So while there’s unlikely to be a rate change, the rhetoric will be dissected for hints on the potential for lower official interest rates and, consequently, cheaper home loan rates.
What the election is doing is leading people to hold off on major financial decisions, such as committing to a house purchase and mortgage. Uncertainty about the shape of the new Government and potential for different outcomes on people’s wallets is being seen as a reason to hold off.
Why commit now when you might have more disposable income in a few weeks?
Prolonged coalition negotiations could extend this malaise for a while longer.
In the meantime, the spring campaign season is underway with HSBC is offering carrots of 10 basis points off its one-year fixed rate and 15 basis points off its two- and three-year rates.
ANZ is hoping to entice customers by wrapping up free travel with home loans.
In the mortgage market last week, Sovereign and ASB Bank lowered four- and five-year rates. ASB Bank now offers 7.4% for both terms. Pacific Prime raised its one-year rate a few basis points to 7.92%.
Also, ANZ withdrew its 20-month fixed rate at the beginning of the month. General Finance and Pacific have joined other no financials lenders in offering standard rates for these types of loans.
For those wanting long-term certainty, Kiwibank still has the best deal in the five-year rate of 7.25%, despite the end of its 6.99% campaign. In the two- and three-year area, BankDirect is the most competitive at 7.45%.
| « Mortgage war bites | Rates expected to remain the same before election » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
