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Mortgage Rates Daily Commentary
Friday 20 September 2019  Add your comment
SBS rate cut; OCR preview

Good morning.

As Spring kicks in, another bank has slashed mortgage rates.

SBS Bank’s 3 year rate drops to 3.89%, level with ASB. Check out our rates table here.

Meanwhile, economists have told us they don’t expect the Reserve Bank to cut the Official Cash Rate next week. See why here: [READ ON].

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Bollard delivers unprecedented rate cut

Reserve Bank governor Alan Bollard cut interest rates by an unprecedented amount citing ongoing global financial market turmoil and a deteriorating outlook for world growth.

Thursday, October 23rd 2008, 9:22AM

by Jenny Ruth

Bollard cut his official cash rate (OCR) from 7.5% to 6.5%, the biggest move since the central bank introduced the measure in March 1999.

The New Zealand dollar bounced sharply after the announcement but had been heavily sold down over night. It jumped from 58.5 US cents to 59.3 cents within 20 minutes of the rate cut.

Nick Tuffley, chief economist at ASB Bank, says after the Reserve Bank announced late yesterday Bollard would hold a press conference – an unusual move after an OCR review between monetary policy statements – rumours started swirling that perhaps the rate cut might be even bigger than the expected one percentage point.

Wholesale interest rate markets, which had already priced in such a cut, were little changed.

Today’s cut is "a pretty prudent decision, given that we’re vulnerable at the moment," Tuffley says.

Bollard said if inflation pressures abate as he expects, further rate cuts are likely.

"The Reserve Bank is still giving a reminder that inflation isn’t entirely absent from its thinking," Tuffley says.

Figures earlier this week showed the annual inflation rate at 5.1%, well above Bollard’s target zero to 3% range, but the current recessionary domestic environment, coupled with rapidly slowing global growth, is expected to dampen inflation.

Robin Clements, an economist at UBS New Zealand, says although keeping inflation in check is Bollard’s job, "I wouldn’t have though that was the dominant concern at the moment." While Bollard mentioned being concerned about construction costs, with housing activity at its lowest in decades, "surely construction costs are going to ease."

Clements says Bollard’s statement was more notable for what it didn’t say, particularly in not explaining why he waited until today to cut rates rather than doing it weeks ago when Australia’s central bank cut rates.

Bollard also made no mention of how much of today’s cut would be passed through to retail borrowers, Clements says.

« OCR reduced to 6.5%OCR cut to 7.5% »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.15 ▼4.04 4.49
ANZ Special - 3.65 ▼3.54 3.99
ASB Bank 5.20 4.15 4.09 4.39
ASB Bank Special - 3.65 3.59 3.89
BNZ - Classic - 3.65 ▼3.49 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
Housing NZ Corp 5.19 ▼4.15 ▼4.09 ▼4.39
HSBC Premier 5.24 3.35 3.35 3.35
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.65 3.85 3.95 3.89
Kiwibank 5.80 4.30 4.34 4.74
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.59 3.99
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.69 4.79 -
Resimac 5.30 4.86 4.14 4.19
Lender Flt 1yr 2yr 3yr
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.69 3.69 ▼3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.65 3.59 3.99
The Co-operative Bank - Standard 5.15 4.15 4.09 4.49
TSB Bank 6.09 4.65 4.59 4.85
TSB Special 5.29 3.85 3.79 4.05
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.34 - - -
Westpac Special - 3.65 ▼3.54 3.99
Median 5.35 4.15 4.09 4.19

Last updated: 20 September 2019 9:30am

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