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Mortgage Rates Daily Commentary
Thursday 23 September 2021  Add your comment
Co-op rate increases; Smaller hikes to follow next month; Full licensing latest

The Co-operative is the latest bank to increase pricing on six month to five year terms today. Its one year special goes to 2.85%, level with ASB and Westpac.

Banks are poised to raise interest rates further next month despite a recent wave of increases in recent weeks: [READ ON]

Slow progress so far on the journey towards full licensing. Here's what the FMA said after approving 80 FAP licenses: [READ ON]

 

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OCR rises, more hikes expected

Reserve Bank governor Alan Bollard raised interest rates as expected, ensuring floating mortgage rates are on the way up.

Thursday, June 10th 2010, 10:03AM 1 Comment

by Jenny Ruth

Bollard raised his official cash rate (OCR) from 2.5% to 2.75%, citing a second year of the economy improving with growth becoming more broad-based, although he expects the household sector to remain relatively cautious.

It's the first change to the OCR since April last year.

Bollard is "signalling it's only the start of normalising interest rates," says Brendan O'Donovan, chief economist at Westpac. While the OCR has a long way to go to return to more normal levels, Bollard has indicated he's very open to letting events determine how fast the OCR moves up, he says.

The central bank is "trying to weigh up the relatively weak consumer against a strong external sector, partcularly strong commodity prices," O'Donovan says. At the same time, it is also trying to moderate the financial market response. "They're saying we will be doing further hikes but let's not get carried away in terms of pricing in a really aggressive cycle."

Bollard said the most likely impact of recent turmoil in European economies is higher bank funding costs. That and the fact long-term interest rates are higher than short-term rates and a greater proportion of home-loan borrowers using floating rate mortgages should reduce the extent to which the OCR needs to rise, he said.

Nick Tuffley, chief economist at ASB Bank, says Bollard highlighted three things: underlying inflation is likely to remain under control, even thought government policy, including raising GST, means headline inflation will rise very sharply; he expects households and businesses to continue to focus on rebuilding balance sheets; and he expects the global economy to continue to look "pretty rosy."

"It strikes me if the economic recovery continues to track along as expected and global financial markets don't implode again, they're going to continue to raise rates," Tuffley says.

Chris Green at First NZ Capital says the tenor of today's statement suggests another 25 basis point rise in the OCR in July. "A gradual removal of stimulus is on track at the moment," with the big question remaining of how the global economy will evolve.

 

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Comments from our readers

On 11 June 2010 at 8:14 am Richard Brown said:
And now NZ will be flooded with foreign currency, pushing up the NZ dollar and making it harder for exporters yet again, and then their employees faced with higher mortgage repayments etc. I often wonder what world Bollard actually lives in? It certainly isn't the same one the rest of us share. It's time to let smarter people who understand global economics run the OCR. Keys should jump on this - he wants to narrow the gap between NZ and Oz and this will not help that aim one bit.
Commenting is closed

 

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▲2.85 ▲3.25 3.55
ANZ 4.44 ▲3.20 ▲3.59 ▲4.00
ANZ Blueprint to Build 1.68 - - -
ANZ Special - ▲2.60 ▲2.99 ▲3.40
ASB Back My Build 1.79 - - -
ASB Bank 4.45 ▲2.85 ▲3.25 3.55
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▲2.85 ▲3.25 ▲3.55
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 4.55 ▲3.45 ▲3.85 ▲4.15
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.25 1.85 2.35 2.65
Heretaunga Building Society 4.99 3.80 3.90 -
Lender Flt 1yr 2yr 3yr
HSBC Premier 4.49 2.19 2.45 2.69
HSBC Premier LVR > 80% - - - -
HSBC Special - 2.25 - -
ICBC 3.69 2.35 2.75 3.05
Kainga Ora 4.43 2.88 3.28 3.59
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.75 ▲3.80 ▲4.00 4.34
Kiwibank - Offset 3.75 - - -
Kiwibank Special 3.75 ▲2.95 ▲3.15 3.49
Liberty 5.69 - - -
Nelson Building Society 4.95 2.99 3.24 -
Lender Flt 1yr 2yr 3yr
Pepper Essential 4.79 - - -
Resimac 3.39 2.98 2.79 3.29
SBS Bank 4.54 2.99 3.39 3.59
SBS Bank Special - 2.49 2.89 3.09
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - ▲2.65 - -
The Co-operative Bank - Owner Occ 4.40 ▲2.85 ▲3.25 ▲3.49
The Co-operative Bank - Standard 4.40 ▲3.35 ▲3.75 ▲3.99
TSB Bank 5.34 3.35 3.75 4.05
TSB Special 4.54 2.55 2.95 3.25
Wairarapa Building Society 4.99 3.55 3.49 -
Lender Flt 1yr 2yr 3yr
Westpac 4.59 ▲3.45 ▲3.85 4.09
Westpac - Offset 4.59 - - -
Westpac Special - ▲2.85 ▲3.25 3.49
Median 4.54 2.95 3.25 3.49

Last updated: 23 September 2021 8:11am

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