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Mortgage Rates Daily Commentary
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Non-banks offer payment holidays and rate cuts

Non-bank lenders Avanti Finance and Resimac will offer borrowers repayment reduction options and deferrals amid the Covid-19 crisis: [READ ON]

Resimac has cut its variable rates. Its rates for new business now start from 3.49%, and two-year fixed rates start from 3.39%. See our full table of market rates here.

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Weak data, global turmoil put paid to floating rates rising this year

Much weaker than expected June quarter growth figures and continuing deterioration in the global outlook have definitely put paid to the chances of floating mortgage rates rising this year.

Thursday, September 22nd 2011, 12:49PM

by Jenny Ruth

The economy grew just 0.1% in the June quarter compared with market expectations of 0.5% and the Reserve Bank's latest published forecast of 0.6%.

"The market's completely priced out any tightening (in interest rates) this year - there wasn't much in there anyway," says Darren Gibbs, an economist at Deutsche Bank.

Gibbs is still forecasting Reserve Bank governor Alan Bollard will start raising his official cash rate (OCR), which directly influences floating mortgage rates, from next March but says a lot could happen to push that further out in the meantime.

Gibbs suggests if it's clear interest rates aren't going up, the debate may shift to whether Bollard needs to cut the OCR further from its current 2.5% record low.

"The hurdle would clearly be very high, more than weak data. It would have to be something fairly dramatic."

Stephen Toplis at Bank of New Zealand is also picking March "but with no conviction – there's a much bigger 'if'' there than there normally is."

While short-term interest rates have fallen, the currency has fallen significantly – it had already dropped more than two US cents ahead of the data and has fallen below 80 US cents since.

The overnight fall was in reaction to offshore developments including global markets' scepticism about US Federal Reserve's plans to drive down long-term interest rates to get the US economy growing and a deepening of the European crisis.

Westpac, which had been forecasting 0.7% economic growth in the June quarter, is sticking, at least for now, with its forecast that the next OCR rise will come in January. Chief economist Dominick Stephens describes today's data as "a pothole rather than a renewed broad-based economic slowdown" at this stage.

He is puzzled at such a weak figure "when the broad swath of capacity and confidence measures were clearly tightening," with the labour market also tightening.

Nevertheless, "clearly, there is now less pressure to increase the OCR," Stephens says.

Tags: Mortgage Rates

« Floating rates unlikely to rise this yearResimac to take majority stake in NZF's securitisation operations »

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 3.55 3.89 3.99
AIA Special - 3.05 3.39 3.69
ANZ 4.44 3.55 3.85 4.49
ANZ Special - 3.05 3.35 3.99
ASB Bank 4.45 3.55 3.89 3.99
ASB Bank Special - 3.05 3.39 3.69
Bluestone 4.44 4.44 4.29 4.34
BNZ - Classic - 3.09 3.35 3.69
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.75 4.10 4.55
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.15 3.15 3.19
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.95 3.09 3.50
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora ▼4.43 ▼3.55 ▼3.85 ▼4.14
Kiwibank 4.40 3.84 4.14 4.40
Kiwibank - Capped - - - -
Kiwibank - Offset 4.40 - - -
Kiwibank Special - 3.09 3.39 3.65
Liberty 5.69 - - -
Lender Flt 1yr 2yr 3yr
Napier Building Society - - - -
Nelson Building Society 4.95 4.09 4.15 -
Pepper Essential 5.18 - 4.98 4.98
Resimac 4.50 ▼3.49 ▼3.39 3.94
RESIMAC Special - - - -
SBS Bank 4.54 4.85 5.05 5.49
SBS Bank Special - 3.09 3.39 3.69
The Co-operative Bank - Owner Occ 4.40 3.25 3.45 3.69
The Co-operative Bank - Standard 4.40 3.75 3.85 4.19
TSB Bank 5.34 3.89 4.15 4.49
TSB Special 4.54 3.09 3.35 3.69
Lender Flt 1yr 2yr 3yr
Wairarapa Building Society 4.99 3.95 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 3.09 3.39 3.69
Median 4.59 3.55 3.85 3.99

Last updated: 8 April 2020 8:55am

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