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Mortgages

Mortgage Rates Daily Commentary
Friday 14 August 2020  Add your comment
Why mortgage rates are likely to fall even lower

Home loan rates are already at record lows, but economists at ASB predict interest rates will plummet even further in the coming months: [READ ON]

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Bollard not quite ready to cut rates, economists say

Most economists expect Reserve Bank governor Alan Bollard won't be quite ready to start cutting interest rates this week but a growing majority are expecting a rate cut by the end of September.

Monday, June 2nd 2008, 9:04PM

by Jenny Ruth

The last time Bollard moved his official cash rate (OCR) was in July last year when he raised it to 8.25%.

A survey by Bloomberg News last week found 13 of 14 economists now expect Bollard to cut rates this year and 10 of them expect the cut by September 30.

The one hold-out is Westpac and chief economist Brendan O'Donovan doesn't expect a rate cut any earlier than March 2009.

"The statement will be far more hawkish than the market expects," O'Donovan says. He agrees weak data over coming months will bring forward the timing of the first rate cut from June or September 2009, but "we think the market has gotten ahead of itself."

The predominant problem for consumers and businesses at present is high costs and inflation. "In that context, it hardly makes sense for the Reserve Bank to say: 'Here's a bit more inflation, does that help?'" O'Donovan says.

Nick Tuffley, chief economist at ASB Bank agrees inflation considerations will rule out an imminent rate cut but Thursday's monetary policy statement "will place much greater weight on clear signs that the economy has come to a halt, opening the window to OCR cuts later this year."

As well as existing inflation, the Reserve Bank will be wary of the risk the New Zealand dollar falls rapidly, boosting imported inflation, Tuffley says.

He doesn't expect any strong signal of subsequent rate cuts but that the market will have reason to continue pricing in a first rate cut "in the vicinity of October."

However, Macquarie Bank's economists say "extremely poor labour market and retail sales data confirmed that the economy had hit a wall at the start of 2008 that rate cuts were needed sooner rather than later."

« Home loan report: Budget stalls rate reliefOCR unchanged, but coming down sooner than expected »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 3.85 3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 ▼2.93 ▼3.07 ▼3.24
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 ▼3.35 2.99 3.35
SBS Bank 4.54 3.05 3.19 3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 2.55 2.69 2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.35 3.49 3.79
TSB Special 4.54 2.55 2.69 2.99
Wairarapa Building Society 4.99 ▼3.55 ▼3.49 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.05 3.13 3.12

Last updated: 14 August 2020 1:06pm

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