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Mortgages

Mortgage Rates Daily Commentary
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Record October mortgage lending; Is a negative OCR now less likely?

Mortgage lending soared to $7.7 billion last month, the highest October figure on record, and further evidence of the red-hot housing market: [READ ON]

Finance Minister Grant Robertson's pleas to the Reserve Bank to control house price inflation could reduce the odds of a negative OCR next year, according to economists: [READ ON]

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New LVR rules to cut Auckland house price inflation

Thursday, June 4th 2015, 10:53AM

by Miriam Bell

Up to 4% could be shaved off Auckland’s house prices - thanks to the Reserve Bank’s new LVR rules.

Tighter LVR restrictions for Auckland investors will reduce Auckland house price growth by 2- 4% in the first year, the RBNZ has estimated in a new consultation paper.

At the same time, a loosening of the rules around required deposits for property outside of Auckland, should see house price growth of about 1% and a 4% increase in house sales.

The RBNZ expected that the investor restrictions, which will require a 30% deposit when borrowing for an investment property, will reduce Auckland housing market transactions by 7% in the first year.

This would equate to a 20% decline in property purchases by investors in Auckland.

Further, the RBNZ expected the restriction to reduce the share of high-LVR lending to owner occupiers by about 2%.

This will result in a further decline in housing market transactions of about 1%.

Over time, the policy will reduce the number of investors with debt in excess of 70% secured on Auckland property to a quarter, the RBNZ paper stated.

“This would reduce the proportion of loans in a position of negative equity in the event of a 30-40% decline in Auckland house prices.”

The RBNZ has said it believes this will better maintain financial stability, which is one of its main objectives.

While several property investor advocates are concerned that the policy will have a negative impact on the rental market, the RBNZ expected that the impact will be limited.

The RBNZ released the paper in preparation for the new rules, which come into force on October 1, and will be consulting on it until July 13.

Discussion of policy objectives and expectations, speed limits, mixed loans, measurement periods and transition arrangements are included in the paper which can be read here.
 

Tags: Macro Prudential Tools RBNZ

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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 3.09 3.25 3.39
ANZ Special - 2.49 2.69 2.79
ASB Bank 4.45 2.49 2.59 2.65
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.49 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.09 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
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 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 ▼2.45 ▼2.65
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.65 2.65
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
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.99 3.15 3.25
SBS Bank Special - 2.49 2.65 2.75
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.49 2.69 2.79
The Co-operative Bank - Standard 4.40 2.99 3.19 3.29
TSB Bank 5.34 3.29 3.29 3.59
TSB Special 4.54 2.49 2.49 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - 2.49 2.69 2.79
Median 4.55 2.94 3.07 2.80

Last updated: 23 November 2020 12:23pm

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