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Mortgage Rates Daily Commentary
Tuesday 19 November 2019  Add your comment
Mortgage rates at cycle low?; Westpac changes approval process

Economists at ASB say it is "quite possible" fixed rate mortgages have hit their lowest point in this cycle: [READ ON]

In case you missed it, some big news from the TMM Better Business Conference last week. Westpac has introduced a new mortgage approval system to cut down turnaround times: [READ ON].

 

 

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More OCR cuts are on the way - RBNZ

The Reserve Bank has confirmed that further OCR cuts are likely to be needed.

Wednesday, July 29th 2015, 10:32AM

by Miriam Bell

Further monetary policy easing and exchange rate depreciation are required for the good of economy, Reserve Bank governor Graeme Wheeler said in a speech in Tauranga this morning.

Of late, the New Zealand economy has experienced a series of shocks - notably plunging dairy prices.

Wheeler said there were risks and uncertainties around the inflation outlook and that, despite recent declines, the exchange rate remains too high for current economic conditions. 

“At current levels of export prices, a more substantial exchange rate depreciation will be required to stabilise the net external liabilities position relative to GDP.”

He noted that current monetary policy settings are providing stimulus to the economy when growth is around 2.5%, which is slightly below potential. 

However, Wheeler poured cold water on the idea that extensive interest rate cuts are on the way this year.

He said the large declines in interest rates predicted by some could only be consistent with the economy moving into recession. 

Contrary to this, the RBNZ believes several factors are supporting economic growth. 

These include the easing in monetary conditions, continued high levels of migration and labour force participation, ongoing growth in construction, and continued strength in the services sector.

In returning inflation to the mid-point of the target band, the RBNZ has to avoid unnecessary volatility in output, interest rates, and the exchange rate.

Wheeler said that aiming to return inflation to around its medium-term target level in about nine to 12 months’ time is an appropriate speed. 

But, as the economy is constantly experiencing shocks and disturbances, policies may need to change, he continued. 

For this reason, the RBNZ regularly reviews and, where necessary, revises its policy settings to meet its price stability objectives.

The RBNZ will be reviewing its growth forecasts in the September monetary policy statement.

Meanwhile, the RBNZ remains conscious of the impact that low interest rates might have on the housing market, Wheeler added. 

Lower interest rates could exacerbate the existing housing pressures in Auckland by further stimulating housing demand. 

However, in the present situation, raising interest rates would be inappropriate as it would put upward pressure on the exchange rate and further dampen CPI inflation, he said.

While the RBNZ remains concerned about the financial stability risks posed by a major correction in Auckland house prices, it believes that macro prudential policy is the most helpful way to ease some of the pressure.

The proposed LVR measures and the policy initiatives announced by Government in the 2015 Budget should begin to ease the impact of investor activity, Wheeler said.

“A strong supply response over several years is needed to address Auckland’s housing imbalance.

“But macro-prudential policy can help to lower the financial and economic risks while important regulatory and infrastructure issues are addressed and additional investment in new housing takes place.” 

Tags: banks Mortgage Rates OCR OCR forecasts RBNZ

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 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 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 ▼4.14 ▲4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - ▼3.39 ▲3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.55 3.39 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 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.34 4.04 4.09 4.39

Last updated: 15 November 2019 4:16pm

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